Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
2. The present economic slowdown is a consequence of both cyclical and structural factors. Comment. (250 words)
Why this question:
India is now in the midst of a significant economic slowdown, the International Monetary Fund has said, urging the government to take urgent policy actions to address the current prolonged downturn.
Key demand of the question:
Explain the recent trends being witnessed in the economy and provide for an analysis as to in what way it is the result of both cyclical and structural factors.
Directive:
Comment– here we have to express our knowledge and understanding of the issue and form an overall opinion thereupon.
Structure of the answer:
Introduction:
Briefly discuss what a cyclic slowdown is; A cyclical slowdown is a period of weak economic growth that occurs at regular intervals. A structural slowdown is a more deep-rooted phenomenon signifying weak economic growth for over a long time.
Body:
Discuss first the structural factors responsible for these issues ranging from investment, Failure of the Insolvency and Bankruptcy Code (IBC), Unemployment etc.
Discuss then the cyclical factors – consumption, savings factor etc.
Explain the recent steps taken by the govt. and the RBI.
Suggest way forward.
Conclusion:
Conclude by suggesting solutions and suggestions as to what can be done to address these issues.
