Challenges For India’s Next Finance Minister
The next government will take charge in New Delhi against the lie behind the many years of economic stability. Indian voters put UPA government in power five years ago. But after that, the Indian Economy is still struggling with high inflation, fiscal stress, and huge current account deficit. Inflation was near double-digit in 2013. It came to 3.25% in 2018, below the average of inflation target given by the government to RBI. No doubt the UPI government got the advantage of global oil prices, but core inflation was declined.
The prior thing to worry about is the next person in the finance ministry. The Indian Economy has started the first quarter of FY 2019 with the growth of 8% but will likely to end the financial year 2019 with a growth of 6.3% which is less than the first quarter.
The recent consumer spending data states that total demand in the market is decreasing. Nominal spending is decreasing because of low inflation.
What are the options for the next Finance Minister?
The Financial Minister may increase the spending in the Union Budget that will be presented in July 2019. Union Government, state government and public sector are borrowing 8.6% of GDP due to which we have the very less financial resource to support the development Says, J.P. Morgan. Exports are not increasing from the past few years.
The Economy is losing momentum. The food inflation is increasing. Current account deficit is also increasing. Monetary policy is also not good. The most important task for the next Finance Minister is to form a structure that can support the economic growth for the next decade but the immediate task should be to fight with the current economic situation.