JAIIB IE and IFS Paper-1 Module-A Unit 11: Issues Facing Indian Economy

31/01/2023

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JAIIB Paper 1 (IE and IFS) Module A Unit 11:Issues Facing Indian Economy (New Syllabus)

IIBF has released the New Syllabus Exam Pattern for JAIIB Exam 2023. Following the format of the current exam, JAIIB 2023 will have now four papers. The JAIIB Paper 1 (Indian Economy & Indian Financial System) includes an important topic called “Issues Facing Indian Economy ”. Every candidate who are appearing for the JAIIB Certification Examination 2023 must understand each unit included in the syllabus. In this article, we are going to cover all the necessary details of JAIIB Paper 1 (IE and IFS) Module A Unit 11: Issues Facing Indian Economy
Aspirants must go through this article to better understand the topic, Banker Customer Relationship and practice using our Online Mock Test Series to strengthen their knowledge of Banker Customer Relationship. Unit 11: Issues Facing Indian Economy

Issues Facing Indian Economy

India will be the world’s fastest-growing major economy. The ongoing COVID-19 pandemic has triggered a long-term health crisis, both globally and in India.
Though economic activity was slowing prior to the pandemic, successive COVID waves have resulted in a profound and widespread economic slowdown, with the potential for long-term repercussions.
Fiscal (Government) authorities have responded, by implementing flexible fiscal policies, including greater support to vulnerable groups. Similarly, the RBI has eased liquidity provision and maintained a prolonged easy monetary policy.
Some of India’s perplexing economic issues encompass weak demand, jobless economic growth, rising COVID infections, with multiple virus mutations, chronic unemployment and under-employment, burgeoning disparities in wealth distribution, poor human capital quality, infrastructure bottlenecks, overdependence on agriculture, rising government debt, urban migration, etc.

Poverty Alleviation

According to the Planning Commission of India’s 2011-12 estimates, 25.7 per cent of the rural population and 13.7 per cent of the urban population were below the poverty line.
Rural poverty rates are higher than urban poverty rates, owing to a lack of decent infrastructure, inadequate food supply, and a weak labour market.
Poverty eradication is a major challenge of planned economic development.

Rising Inequalities

While India has one of the world’s fastest growing economies, it also has one of the most unequal societies Inequality has been steadily increasing over the previous few decades, and it has been especially pronounced after the 1991 economic reforms.
The affluent have amassed a large portion of the wealth generated by crony capitalism and inheritance. The rich are growing richer at a much faster rate, while the poor continue to struggle to earn a living wage and get access to quality education and healthcare facilities, which continue to suffer from persistent underinvestment.

Migration And Excessive Pressure On Resources

Migration is the movement of people from one location to another, in order to take advantage of better economic possibilities in the receiving location.
Migration is a worldwide phenomenon that is influenced by numerous aspects, including social, political, cultural, environmental, health, and education. The linkages between environmental changes and migration are very complex.
Migration is often the outcome of a series of factors — economic, social, and political – that are worsened by changing environmental conditions as well as developmental and demographic situations. Because of the strong links between environmental conditions and the political, economic, and social forces that drive migration, it is difficult to distinguish ‘pure’ environment-induced migration.

Possible Remedies

The migration issue will worsen in the coming years, as climate change-related migration flows increase, particularly in middle-income economies like India.
This is due to the fact that climate change is expected to increase the frequency and intensity of extreme environmental events, such as drought, sea level rise, flooding, and cyclones.
The migration of people from rural regions to cities is rising. A new middle class is forming, with hopes for better living standards.
Promoting agriculture and agri-businesses will be extremely beneficial in this regard. A concerted effort is needed in the direction of making farmers get non-farm sector job.

Pandemic Situation

The COVID-19 pandemic was the first of its kind to hit the world in the twenty-first century, hitting all economies, in varying degrees.
Repeated waves of infections, supply-chain disruptions, inflation, and massive unemployment have made policymaking challenging.
The cyclical slowdown that already had commenced in India before the breakout of pandemic, was worsened by the epidemic.
The pandemic has taken a significant toll on livelihoods and production capabilities, with far-reaching economic and social consequences, and the post-pandemic new normal may be very different from the pre-pandemic
The Russia-Ukraine war has also delayed the recovery’s momentum, with its consequences reflecting in record-high commodity prices, an even weaker global growth outlook, and tighter global financial conditions.