India's persistent trade deficit is a complex issue with several contributing factors and implications for the economy. Here are some of the key factors and potential measures to address this challenge: Factors Contributing to India's Trade Deficit: Import-Dependent Economy: India's economy is heaviRead more
India’s persistent trade deficit is a complex issue with several contributing factors and implications for the economy. Here are some of the key factors and potential measures to address this challenge:
Factors Contributing to India’s Trade Deficit:
- Import-Dependent Economy:
- India’s economy is heavily dependent on imports, particularly for energy (oil and gas), electronics, machinery, and raw materials. This high import dependence leads to a trade deficit.
- Overdependence on imports makes the economy vulnerable to fluctuations in global commodity prices and exchange rate volatility.
- Lack of Export Competitiveness:
- Indian exports lack global competitiveness due to factors such as high production costs, inefficient logistics, and lack of technological innovation.
- Sectors like manufacturing and agriculture face challenges in terms of product quality, branding, and market access, limiting India’s export potential.
- Structural Imbalances:
- India’s consumption-driven economic growth model, with a high propensity to import consumer goods, contributes to the widening trade deficit.
- Lack of investment in infrastructure, research and development, and skilled labor development hinders the country’s ability to boost exports.
- Currency Fluctuations:
- Volatility in the Indian rupee’s exchange rate against major currencies, such as the US dollar, can increase the cost of imports and make Indian exports less competitive.
- This can further widen the trade deficit, as imports become more expensive, and exports become less attractive in global markets.
Urbanisation in contemporary India is 68 % in rural and 38% in urban areas. the percentage in rural areas is relatively less compared to similar economies even though rate of rural urban migration and expansion of cities are high,this is known as under urbanisation. Meanwhile India's megacities aRead more
Urbanisation in contemporary India is 68 % in rural and 38% in urban areas. the percentage in rural areas is relatively less compared to similar economies even though rate of rural urban migration and expansion of cities are high,this is known as under urbanisation. Meanwhile India’s megacities are over urbanised where the population is well beyond carrying capacity.
CHALLENGES OF URBANISATION
For instance, people in Chennai had to rely on water tankers and desalination facilities due to a serious water crisis in 2019.
SOLUTIONS TO CREATE SUSTAINABLE AND LIVEABLE CITIES
- development of green spaces- Green space interventions nourish the city’s existing character, improve environmental conditions, promote outdoor recreational spaces and active lifestyles, and protect biodiversity by creating wildlife habitats.
- encouraging sustainable living practices- proper waste management, Implementing the “Sponge City” concept, which involves theintegration of permeable pavements, green roofs, rainwater gardens, and other water-absorbing features into urban landscapes.
- Popularizing smart city infrastructure—such as smart grids, intelligent traffic management systems, and Internet of Things-enabled public services—will increase productivity, lower carbon emissions, and improve the standard of living for locals.
- effective public transportation system-which eventually reduces the vehicular emissions and traffic commotion.
- There needs to be a multidimensional approach towards policy making involving the State ,cooperates and civil society and need to integrate sustainable urban planning, infrastructure development and social welfare activities. Some of the government initiated programmes related to urban areas- Smart cities, AMRUT Mission, Swatch Bharat mission-urban,Aspirational District Programme,Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM).
- Planning for the best possible use of urban land- All towns and cities included in the “Healthy Cities Programme” should tighten rules to make the most use of their planning area, or urban land. There must be regular review of town and country planning or urban and regional development acts.
- Enhanced Private Sector participation: The inclusion of private sector consultancies in urban planning and development is one way to improve the participation of the private sector in these processes.
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