Int rates cannot affect the growth as it forms only an insignificant share of the over all cost of production. The growth gets affected for several reasons. The Govt's inaction on fiscal front,infrastructure development,on black money,corruption and so on and so forth has a negative impact on industrial climate. Labour reforms, legal reforms and administrative reforms which are long overdue in Indian economy affect the industrial growth negatively. The general level of confidence in our political and administrative system has been on the wane for the past few years and it needs to be revived.The industrialists have to be made more responsive to the societal needs and their greed to make money at any cost ignoring the national priorities needs to be given a cultural change. Will the Govt, bureaucrats and the industrialists do an introspection of their method of exploiting the society and come out clean to mutually cooperate and coordinate to work for the economy's welfare without ignoring their own pursuits?The economy needs a changed mindset and a common objective to take the nation on the growth trajectory without murmuring on issues like interest cost which is not significant.
(This appeared in ET Epaper dt 14/10/11).
Dr.T.V.Gopalakrishnan
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