Economic Reforms to Improve the Indian Economy

India, one of the fastest growing economies in the world, requires certain economic reforms so as to boost the economy. Recently, the Reserve Bank of India has increased the interest rates to counter the effects of inflation and fall in the exchange rate of Indian rupees. The Indian rupee has hit an all time low of 61.20 to the US Dollar. The RBI has introduced a series of measures to counter the effects such as the increase of short term interest rates on commercial paper and bonds.

However, the government has to adopt policies to reduce external trade imbalances. Economic recovery is impossible as businesses are all time low and the rising interest rates may affect the global financial markets in an adverse manner. Various structural reforms are essential to inspire confidence in both domestic and foreign investors in the country.

Economic Reforms and the Growth of the Country

The earlier economic reforms have helped the country to grow although it was below the potential of the country. The country can expect a better growth rate by implementing the remaining reforms and orienting government funds towards the development of infrastructure, health and education. The manufacturing sector exhibits a consistent form of growth and therefore it is believed to play a major role in the development of the country. The country experienced initial boom in the IT sector and now the manufacturing sector is growing at a rapid pace.

Among different economic reforms, the government aims to improve the agricultural and rural sector of the country. This can be done by improving the agro based industries in the rural areas, increasing agricultural productivity, improve the rural facilities such as roads, water supply, telecommunications and so forth.

The public sector investments and the economic reforms can improve the condition of the country. The economic reforms should be based on improving the health and educational system of the country. By implementing these reforms, the rural sector can participate in the national growth and development.

Apart from the IT sector, the sector of bio-technology is another field which records substantial growth and development in the country.