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16 biggest problems facing the Indian economy

Last updated on: June 4, 2013 09:01 IST

16 biggest problems facing the Indian economy

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India's GDP climbed 4.8 per cent year-over-year in the January-March quarter. This was the slowest pace of growth in a decade. For the fiscal year ending March 31, growth was 5 per cent, down from 6.2 per cent the previous year, according to Business Insider.

Let's take a look at 16 biggest problems facing the Indian economy.

Source: Business Insider and World Economic Forum

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Image: A view of India Gate in New Delhi.
Photographs: B Mathur/Reuters
Tags: GDP , India

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Infrastructure

Inadequate supply of infrastructure: 20.4 per cent say its a problem

Indian business community repeatedly cites infrastructure as the single biggest hindrance to doing business, well ahead of corruption and bureaucracy.

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Image: Labourers are silhouetted against the setting sun in Hyderabad.
Photographs: Krishnendu Halder/Reuters
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16 biggest problems facing the Indian economy

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Corruption

Corruption: 15.8 per cent say its a problem

It must be noted, however, that the situation has been slowly improving since 2006.

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Image: An employee counts rupee notes at a cash counter inside a bank in Kolkata.
Photographs: Rupak De Chowdhuri/Reuters
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16 biggest problems facing the Indian economy

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Bureaucracy

Inefficient government bureaucracy: 12.7 per cent say its a problem

Discontent within the business community remains high about the lack of reforms and the perceived inability of the government to push them through.

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Image: A view of the Parliament building in New Delhi.
Photographs: B Mathur/Reuters
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Policy

Policy instability: 7.6 per cent say its a problem

Indeed, public trust in politicians has been weakening for the past three years.

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Image: A labourer shovels wheat grain at a wholesale grain market in Amritsar.
Photographs: Munish Sharma/Reuters
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Inflation

Inflation: 7.5 per cent say its a problem

The macroeconomic environment continues to be characterised by large and repeated public deficits and the highest debt-to-GDP ratio among the Brics.

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Image: Customers shop inside a superstore in Ahmedabad.
Photographs: Amit Dave/Reuters
Tags: GDP , Indian

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16 biggest problems facing the Indian economy

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Financing

Access to financing: 6.2 per cent say its a problem

India continues to be penalised for its disappointing performance in the areas considered to be the basic factors underpinning competitiveness.

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Image: An employee counts currency notes at a cash counter inside a bank in Mumbai.
Photographs: Rupak de Chowdhuri/Reuters
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16 biggest problems facing the Indian economy

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Tax

Tax regulations: 6.2 per cent say its a problem

The country's supply of transport, ICT and energy infrastructure remains largely insufficient and ill-adapted to the needs of the economy.

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Image: A girl displays a Rs 1,000 note in Mumbai.
Photographs: Reuters
Tags: ICT

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Labour

Restrictive labour regulations: 5.7 per cent say its a problem

Despite these considerable challenges, India does possess a number of strengths in the more advanced and complex drivers of competitiveness.

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Image: Women labourers throw dust on a road tarmac under construction at Bharadva village in Gujarat.
Photographs: Amit Dave/Reuters

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Workforce

Inadequately educated workforce: 5.1 per cent say its a problem

This 'reversed' pattern of development is characteristic of India.

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Image: Workers are pictured beneath clocks displaying time zones in various parts of the world at an outsourcing centre in Bangalore.
Photographs: Vivek Prakash/Reuters
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Innovation

Insufficient capacity to innovate: 3.0 per cent say its a problem

It can rely on a fairly well developed and sophisticated financial market.

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Image: Workers at their workstations on the floor of an outsourcing centre in Bangalore.
Photographs: Vivek Prakash/Reuters
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Instability/coups

Government instability/coups: 2.8 per cent say its a problem

It can channel financial resources to good use, and it boasts reasonably sophisticated and innovative businesses.

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Image: Prime Minister Manmohan Singh in Mumbai.
Photographs: Danish Siddiqui/Reuters
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Work ethic

Poor work ethic in national labour force: 2.7 per cent say its a problem

Large emerging economies such as Brazil, the Russian Federation, India, China and South Africa are growing somewhat less than they did in recent years.

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Image: Workers walk past a coal port at Mundra in Gujarat.
Photographs: Amit Dave/Reuters

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Tax

Tax rates: 1.9 per cent say its a problem

India is the worst performer among the Brics, with concerns in both areas of sustainability.

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Image: A man holds a slip of paper with the queue number as he waits to speak with an official inside the Income Tax office in New Delhi.
Photographs: Mansi Thapliyal/Reuters
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Security

Crime and theft: 1.0 per cent say its a problem

India is not providing access to some basic services to many of its citizens (only 34 per cent of the population has access to sanitation, for example).

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Image: People walk past placards during a demonstration by jewellers and workers in Mumbai. Thousands of jewellers shut their stores and held a protest against a rise in burglaries and attacks on gold merchants.
Photographs: Arko Datta/Reuters
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Forex

Foreign currency regulations: 0.7 per cent say its a problem

The employment of much of the population is also vulnerable, which - combined with weak official social safety nets - makes the country vulnerable to economic shocks.

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Image: A money changer counts dollar notes in Mumbai.
Photographs: Arko Datta/Reuters
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Healthcare

Poor public health: 0.7 per cent say its a problem

The picture is even bleaker in the health and basic education pillar. Despite improvements across the board over the past few years, poor public health and education standards remain a prime cause of India's low productivity.


Image: Gopal Kishan, 16, plays with his four-month-old baby, Alok, near Baran in Rajasthan.
Photographs: Danish Siddiqui/Reuters

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