Two weak aspects of the economy: fiscal deficit and current account deficit

- Atapata of Arthakarana-Dhawal Mehta

- India's per capita income is very low compared to developed countries

Growing Current Account Deficit : India's Current Account Deficit which is called Current Account Deficit in English has nothing to do with our Commercial Banks Current Account. Current Account Deficit refers to all exports of goods and services from a country. It is an indicator of how much more a country imports all goods and services than that. If our exports of merchandise (goods and services) are greater than our imports, our foreign exchange reserves increase and our rupee strengthens against dollars or other currencies. Pakistan and Sri Lanka's current account deficits have worsened to such an extent that their governments have been reduced to commodity status. India also experienced a foreign exchange crisis in the late 1950s and 1960s. Both the current account deficit and the large fiscal deficit in India are the weak side of the Indian economy. Merchandise (goods and services) exports to India are continuously decreasing in December 2022 and January 2023. The main reason for this is the economic slowdown at the global level. India's current account deficit has reached 4.4 percent of our GDP in the quarter of July-August 2022 and the debt of the Government of India has reached 85-86 percent of its GDP due to our ever-increasing fiscal deficit. It is harmful for a country's government to have a large debt because when the government incurs debt, it has to pay regular interest on it. A significant portion of our budgetary revenue is spent on interest on government debt. The original amount also has to be returned. The cost of both together is considered as debt servicing by Arthashastra. Of course, one of the strongest aspects of the Indian economy is that India's economic growth rate for FY 2022-2023 is between six and seven percent (this estimate fluctuates), while most economically prosperous countries are moving at a growth rate of two to four percent. is paid. Except for a few, small countries, India ranks first in terms of economic growth rate due to the economy of the big countries of the world. Japan is alarmed by a projected growth rate of less than two percent. Of course, we have overtaken the UK as the world's largest economy, but we should not be too happy because our per capita income is about $2,200, while China's is $10,000, Russia's is about the same, and America's is $60,000. In short, our national income of around 3 trillion dollars is distributed among a population of 140 crores and the average annual income per capita is very low and India is still considered as a low-middle income group nation. So still when we sing sare jahan se achcha hindosta hamara gaie, our nationalistic love is of course expressed in it which is a subjective feeling. The reality is somewhat different.

Excess of Subsidies: One of the worst aspects of the Indian budget is the huge subsidies on food and fertilizers. Of course, our MNREGA scheme and food security scheme are very commendable, but if 80 crore people of the country get some amount of free grain, do 80 crore people in the country live below the poverty line? We need to spend more money on education and health. Of course, a good thing is that the growth rate of world income (total income of the world) is higher than the population growth rate of 1.2 percent of the world. For the last several years, the world has progressed at an economic growth rate of more than 33 percent. In 2022, the economic growth rate of the world was 3.4 percent.