GDP Growth rate | Challenges that Govt is facing to be a 5 trillion

Most of the companies have posted 3rd quarter results but still results does not give any hope about the future growth. Market has the fear of Coronavirus which has already been declared as global emergency by WHO. In such scenarios GDP growth rate must not be impacted.

Here are the major challenges that government needs to take care to pump up India GDP growth rate.


Unemployment is still remain one of the major challenge that government is facing to become a 5 trillion economy. Government have been showing Pakodawala, Chaiwala and other profession as the employment given by the government. Whether government has given those employment but they never going to contribute the economy with direct tax. Government need to improve direct tax collection and bring more and more people in the tax criteria with clean income. Even Pakodawala and Chaiwala will have more income and customer when more companies will give employment in India. Employment is one of the major challenge to improve GDP growth rate.


Economic slowdown is not just because of the global economic slowdown. In India demonetization and GST also played major role though it was a good step but still we are waiting to see the positive impact in economy. Government has already taken quite some steps to improve the economic situation such as corporate tax cut, optional new tax regime, banks merger and all. Government is also increasing the government spending but this will take time because government can spend all the money at once. Government can just create the policy and implement them over the time.


Coronavirus outbreak just came out from nowhere and impacted global economic activities. Indian import is going to be 28% less due to coronavirus and this is going to impact the economy directly. So we can not expect major upside in the coming quarter. China is one of the economy in the world and the biggest exporter too. Due to coronavirus impact China is not able to export many of its supplies and this will impact the world economy.


Indian manufacturing industry is also not doing good. After the 3rd quarter results, we see that companies are still struggling to earn profit. Even the market giants have posted the mixed results. Investors are focused on the consumption based themes and picking quality stocks because in this situation where every time when we see end of this bear market a new challenge comes and push the market downside.


Many major banks are suffering from the reduced asset quality. This quarter result shows that the asset quality is reduced, and there is fear that these banks can post increase in NPA in next quarter results. Some banks have improved the asset quality but still not in majority. India to become a 5 trillion economy and to improve GDP growth rate banks needs to do better.

Indian GDP growth rate has become crucial when population increasing rapidly and in some time its going to be on top with more than 150 crore people. These challenges must be taken care of as early as possible.

Also read my other article about the gdp growth

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