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Economic circumstances are converging to create conducive conditions for reforms that could quell the risk of stagflation and India needs make use of it to turn this crisis in to an opportunity. Comment.

Topic:  Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment;

5. Economic circumstances are converging to create conducive conditions for reforms that could quell the risk of stagflation and India needs make use of it to turn this crisis in to an opportunity. Comment. (250 words)

Reference: Live Mint

Why the question:

The encouraging news that effective vaccines can be administered soon, it is time for the country to begin the task of reconstruction which offers an opportunity for India to climb back on to growth trajectory. The article covers this.

Key Demand of the question:

To explain about the need for reforms and what reforms are needed in order to improve the fiscal situation in the country.

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:

Start by giving context that the turn of the year, improving business climate, strong capital account balance and imminent mass vaccination bring good tidings to India economy.

Body:

Explain the need for reforms at this point given that the economy has been already hit by the impact of demonstration, GST and weak growth before the pandemic further battered it.

Suggest reforms in order to achieve fiscal effectiveness, capitalization of private sector, Revitalization of the banking sector, focusing on micro, small and medium enterprises, achieve financial closure for existing projects and kick-start employment and demand etc.

Conclusion:

Conclude with a way forward especially with the budget upcoming in order to make most of the opportunity.

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