“Impact Of Government Policies on

Economic Development”
MINOR PROJECT
SUBMITTED TO THE
Department Of Commerce
SHIA P.G COLLEGE LUCKNOW

For The Examination Of

B.COM VI Semester

BY

DANIYA ZIA
2110732010239
Under The Guidance Of
DR KIRTI PRAKASH

Department of Commerce

SHIA P.G COLLEGE,LUCKNOW.

2023-2024

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 DECLERATION

I DANIYA ZIA ,confirm that the research presented in this Minor Project ““Impact
Of Government Policies on Economic Development”is my Original endeavour the
material included in this Minor Project has not been Previously Submitted For
Conferrel of any other academic degree or certificate this affirm that I have duly
recognized attributed and credited the research authors wherever their work has been
referenced in the written Words and the body of the project .I affirm that I have not
intentionally used any content ,including work , paragraph , text data ,Findings etc .,
from other Sources

Date DANIYA ZIA

Place : Roll N0 : 2110732010239

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 ACKNOWLEDGMENTS

I Express gratitude to the divine for the multitude of favours that have been granted to me . I
would like to extend my heartfelt appreciation to my supervisor DR KIRTI PRAKASH. I
express my gratitude to him for his unwavering assistance during my Minor Project work, as
well as for his patience , inspiration , excitement and vast expertise . The ongoing directions
provided by him has been invaluable in doing me Minor Project

I would like to express my most sincere thanks to all the Faculty members of the Department
of Commerce , Shia P.G College , as well as the staff of Maulana Mirza Mohd Athar Library
, for their unwavering support.

Date DANIYA ZIA

Place: 2110732010239

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 TABLE OF CONTENT

Serial No CONTENT Page no

1 TITLE PAGE 1

2 DELERATION 2

3 ACKNOWLEDGEMENT 3

4 INTRODUCTION 5-20

5 LITERATURE REVIEW 21-27

6 RESEARCH METHODOLOGY 28-42

7 DATA ANALYSIS AND INTERPRETATION 43-56

8 SUGGESTIONS 57

9 CONCLUSION 58

10 REFERENCES 59-60

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 INTRODUCTION
The Indian economy was in distress at the brink of the country‟s independence. Being a
colony, she was fulfilling the development needs not of herself, but of a foreign land. The
state, that should have been responsible for breakthroughs in agriculture and industry, refused
to play even a minor role in this regard. On the other hand, during the half century before
India‟s independence, the world was seeing accelerated development and expansion in
agriculture and industry - on the behest of an active role being played by the states. British
rulers never made any significant changes for the benefit of the social sector, and this
hampered the productive capacity of the economy. During independence, India‟s literacy was
only 17 percent, with a life expectancy of 32.5 years. Therefore, once India became
independent, systematic organisation of the economy was a real challenge for the government
of that time. The need for delivering growth and development was in huge demand in front of
the political leadership - as the country was riding on the promises and vibes of national
fervour.

Today India is ranked the seventh largest economy, and third largest in terms of Purchasing
Power Parity (PPP). The Indian economy‟s GDP is pegged at $ 2.9 tn. At a press conference,
Finance Minister Arun Jaitley commented, „We keep oscillating between the fifth and the
sixth largest economy, depending on the dollar rate. As we look at the years ahead, we will be
$ 5 tn by 2024 and $ 10 tn by 2030 or 2031.‟ The GDP per capita in India was $ 1963.55 in
2017. The GDP per Capita in India is equivalent to 16% of the world's average, and averaged
$ 693.96 from 1960 until 2017. It reached an all - time high of $ 1963.55 in 2017. As per a
recent WEF report titled 'Future of Consumption in Fast-Growth Consumer Market – India',
India‟s market size is pegged to grow at a thriving $ 6 tn in the coming years. India has
emerged as the fastest growing major economy in the world and is expected to be one of the
top three economic powers in the world over the next 10-15 years, backed by its robust
democracy and strong partnerships.

TOP PERFORMING SECTORS OF INDIAN ECONOMY:

The adoption of the New Economic Policy in 1991 saw a landmark shift in the Indian
economy, as it ended the mixed economy model and license raj system - and opened the

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Indian economy to the world. An overview of the top performing sectors of the Indian
economy is given below:

Agricultural Sector:

One of the most important sectors of the Indian economy remains Agriculture. Its share in
the GDP of the country has declined and is currently at 14%. However, more than 50% of the
total population of the country is still dependent on agriculture. Keeping this in mind, the
Union Budget 2017 - 18 gave high priority to the agricultural sector and aimed to double
farmers‟ incomes by 2022. Government subsidies to agriculture are at an all - time high.
Further, cropping patterns have shifted in favour of cash crops such as sugarcane and rubber.
Introduction of cooperative farming like – e - choupal etc. Rise of SHGs such as Lijjat Papad.
Agricultural land is being brought under industrial and commercial use, thereby straining the
remaining agricultural land. Many export sectors have been opened for agricultural goods

Industry Sector:

Another important part of the Indian economy is the Industry sector. Changes such as the end
of the „Permit Raj‟ and opening up of the economy were welcomed in the country with great
enthusiasm and optimism. As a result of these changes, the industrial potential of the
economy has increased since 1991. Proliferation of industries, from traditional iron and steel
to jute and automobiles. Autonomy in production, marketing and distribution. Reduced red -
tapism. Encouragement to private investments, both domestic as well as FDI. Transfer of
technology and benefits of research and development to the advantage of the economy.
Arrival of investment models such as joint ventures, public-private partnerships, MNCs.
Private players got an opportunity to enter new sectors, which were earlier under government
monopoly.

Services Sector:

The sector that benefited most from the New Economic Policy was the services sector.
Banking, Finance, Business Process Outsourcing - and most importantly Information
Technology services - have seen double - digit growth. Indian IT giants such as Infosys,
WIPRO and TCS have made their mark on the global platform. 60 percent of the GDP
contribution comes from the services sector. India, with its huge demographic dividend
potential, has emerged as the IT hub of the world. New employment opportunities are being
created in this sector. Opening of transportation, tourism and medical sectors have led to the

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growth of service sector competencies. RBI has transitioned from being a regulator to a
facilitator. Product diversity of financial investments.

Food Processing:

Food processing has emerged as a high - growth, high - profit sector and is one of the focus
sectors of the „Make in India‟ initiative. The vast availability of raw materials, resources,
favourable policy measures and numerous incentives have led India to be considered as a key
attractive market for the sector. With a population of 1.3 bn and an average age of 29, as well
as a rapidly growing middle - class population that spends a high proportion of their
disposable income on food, India boasts of a large consumer base. The total consumption of
the food and beverage segment in India is expected to increase from $ 369 bn to $ 1.14 tn by
2025.

Manufacturing Sector:

The manufacturing sector is the second largest contributor to India‟s GDP after the Services
sector. Various government initiatives like Make in India, MUDRA, Sagarmala, Startup
India, Freight Corridors, along with a whole - hearted contribution from states, will raise the
share of the manufacturing sector in the foreseeable future. However, if India aims to raise its
share of manufacturing in GDP to around 25%, the industry will have to significantly step up
its research and development expenditure. The quantum of value addition has to be increased
at all levels and the government needs to offer attractive remuneration to motivate people to
join the manufacturing sector

RECENT DEVELOPMENTS IN THE ECONOMY OF INDIA:

Besides these developments and reforms, it is imperative to bear in mind that in order to tap
the highest potential of the economy and ensure good governance, an optimal level of
synergy is required between the central and state government. This will not only add strength
to our cooperative federal structure but will also strengthen India‟s economy. Initiatives such
as Goods and Services Tax (GST), Insolvency and Bankruptcy Code (IBC), Startup
India and Digital India. These, among others, have helped the Indian economy jump 65 ranks
(in the last four years) in the World Bank‟s Ease of Doing Business Report. These measures
cemented India‟s reputation as one of the few bright spots in an otherwise grim global

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 economy. India is among the fastest growing major economies, underpinned by a stable
macro - economy with declining inflation and improving fiscal and external balances.

FUTURE OF INDIAN ECONOMY

To make India a $ 5 tn economy by 2030, and to achieve consistent 8% growth, NITI Aayog
has released a comprehensive document titled „Strategy for New India @75‟. Its main
objectives are Doubling farmers‟ incomes. Creating an all India talent pool for the entre and
States together - such as the All India Services. Providing a major boost to the „Make in
India‟ campaign. Achieving 22% tax to GDP ratio by 2023 - up from the current 17%.
Achieving 36% of investment rate by 2023 - up from the current 29

Market Size

India‟s gross domestic product (GDP) at current prices stood at Rs. 51.23 lakh crore (US$
694.93 billion) in the first quarter of FY22, as per the provisional estimates of gross domestic
product for the first quarter of 2021-22. India is the fourth-largest unicorn base inthe world
with over 21 unicorns collectively valued at US$ 73.2 billion, as per the Hurun Global
Unicorn List. By 2025, India is expected to have ~100 unicorns by 2025 and will create ~1.1
million direct jobs according to the Nasscom-Zinnov report „Indian Tech Start- up‟. India
needs to increase its rate of employment growth and create 90 million non-farm jobs between
2023 and 2030's, for productivity and economic growth according to McKinsey Global
Institute

Recent Delopment

With an improvement in the economic scenario, there have been investments across various
sectors of the economy. The private equity - venture capital (PE-VC) sector recorded
investments worth US$ 10.7 billion across 137 deals in August 2021, registering a 5x YoY
growth. Some of the important recent developments in Indian economy are as follows

 As of January 19, 2024, India‟s foreign exchange reserves stood at US$ 616.14 billion.

 In 2023, India saw a total of US$ 49.8 billion in PE-VC investments.

 Merchandise exports in December 2023 stood at US$ 38.45 billion, with total merchandise
exports of US$ 505.15 billion during the period of April-December (2023-24).

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 India was also named as the 48th most innovative country among the top 50 countries,
securing 40th position out of 132 economies in the Global Innovation Index 2023. India rose
from 81st position in 2015 to 40th position in 2023. India ranks 3rd position in the global
number of scientific publications.

 At the beginning of January 2024, the PMI Services comfortably remained in the
expansionary zone, registering a value of 61.2.

 In December 2023, the gross Goods and Services Tax (GST) revenue collection stood at
Rs.1,64,882 crore (US$ 19.80 billion), of which CGST is Rs. 30,443 crore (US$ 3.65 billion),
SGST is Rs. 37,935 crore (US$ 4.55 billion).

 Between April 2000–September 2023, cumulative FDI equity inflows to India stood at US$
953.14 billion.

 In November 2023, the overall IIP (Index of Industrial Production) stood at 141. The Indices
of Industrial Production for the mining, manufacturing and electricity sectors stood at 131.1,
139.2 and 176.3, respectively, in November 2023.

 According to data released by the Ministry of Statistics & Programme Implementation

(MoSPI), India‟s Consumer Price Index (CPI) based retail inflation reached 5.55% in
November 2023.

 Foreign Institutional Investors (FII) inflows between April-July (2023-24) were close to Rs.
80,500 crore (US$ 9.67 billion), while Domestic Institutional Investors (DII) sold Rs. 4,500
crore (US$ 540.56 million) in the same period. As per depository data, Foreign Portfolio
Investors (FPIs) invested Rs. 261,856 crore (US$ 31.5 billion) in India during Aril-December
(2023-24).

 The wheat procurement during RMS 2023-24 (till May) was estimated to be 262 lakh metric
tonnes (LMT) and the rice procured in KMS 2023-24 was 385 LMT. The combined stock
position of wheat and rice in the Central Pool is over 579 LMT (Wheat 312 LMT and Rice
267 LMT).

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 GOVERNMENT INITIATIVES

Over the years, the Indian government has introduced many initiatives to strengthen the
nation's economy. The Indian government has been effective in developing policies and
programmes that are not only beneficial for citizens to improve their financial stability but
also for the overall growth of the economy. Over recent decades, India's rapid economic
growth has led to a substantial increase in its demand for exports. Besides this, a number of
the government's flagship programmes, including Make in India, Start-up India, Digital India,
the Smart City Mission, and the Atal Mission for Rejuvenation and Urban Transformation, is
aimed at creating immense opportunities in India. In this regard, some of the initiatives taken
by the government to improve the economic condition of the country are mentioned below:

 On January 22, 2024, Prime Minister Mr. Narendra Modi announced the 'Pradhan Mantri
Suryodaya Yojana'. Under this scheme, 1 crore households will receive rooftop solar
installations.

 On September 17th, 2023, Prime Minister Mr. Narendra Modi launched the Central Sector
Scheme PM-VISHWAKARMA in New Delhi. The new scheme aims to provide recognition
and comprehensive support to traditional artisans & craftsmen who work with their hands and
basic tools. This initiative is designed to enhance the quality, scale, and reach of their
products, as well as to integrate them with MSME value chains.

 On August 6th, 2023, Amrit Bharat Station Scheme was launched to transform and revitalize
1309 railway stations across the nation. This scheme envisages development of stations on a
continuous basis with a long-term vision.

 On June 28th, 2023, the Ministry of Environment, Forests, and Climate Change introduced
the „Draft Carbon Credit Trading Scheme, 2023‟.

 From April 1st, 2023, Foreign Trade Policy 2023 was unveiled to create an enabling
ecosystem to support the philosophy of „AtmaNirbhar Bharat‟ and „Local goes Global‟.

 In order to enhance India‟s manufacturing capabilities by increasing investment and

production in the sector, the government of India has introduced the Production Linked
Incentive Scheme (PLI) for Pharmaceuticals.

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 Prime Minister‟s Development Initiative for North-East Region (PM-DevINE) was
announced in the Union Budget 2022-23 with a financial outlay of Rs. 1,500 crore (US$
182.35 million).

 Prime Minister Mr Narendra Modi has inaugurated a new food security scheme for providing
free food grains to Antodaya Ann Yojna (AAY) & Primary Household (PHH) beneficiaries,
called Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY) from January 1st, 2023.

 The Amrit Bharat Station scheme for Indian Railways envisages the development of stations
on a continuous basis with a long-term vision, formulated on December 29th, 2022, by the
Ministry of Railways.

 On October 7th, 2022, the Department for Promotion of Industry and Internal Trade (DPIIT)
launched Credit Guarantee Scheme for Start-ups (CGSS) aiming to provide credit guarantees
up to a specified limit by start-ups, facilitated by Scheduled Commercial Banks, Non-
Banking Financial Companies and Securities and Exchange Board of India (SEBI) registered
Alternative Investment Funds (AIFs).

 Telecom Technology Development Fund (TTDF) Scheme was launched in October 2022 by
the Universal Service Obligation Fund (USOF), a body under the Department of
Telecommunications. The objective is to fund R&D in rural-specific communication
technology applications and form synergies among academia, start-ups, research institutes,
and the industry to build and develop the telecom ecosystem.

 Home & Cooperation Minister Mr. Amit Shah laid the foundation stone and performed
Bhoomi Pujan of Tanot Mandir Complex Project under Border Tourism Development
Programme in Jaisalmer in September 2022.

 In August 2022, Mr. Narendra Singh Tomar, Minister of Agriculture and Farmers
Welfare inaugurated four new facilities at the Central Arid Zone Research Institute

 In July 2022, Deendayal Port Authority (DPA) announced plans to develop two Mega Cargo
Handling Terminals on a Build-Operate-Transfer (BOT) basis under Public-Private
Partnership (PPP) Mode at an estimated cost of Rs. 5,963 crore (US$ 747.64 million).

 In July 2022, the Union Cabinet chaired by Prime Minister Mr. Narendra Modi, approved the
signing of the Memorandum of Understanding (MoU) between India & Maldives. This MoU

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 will provide a platform to tap the benefits of information technology for court digitization and
can be a potential growth area for IT companies and start-ups in both countries.

 India and Namibia entered a Memorandum of Understanding (MoU) on wildlife conservation

and sustainable biodiversity utilization on July 20th, 2022, for establishing the cheetah into
the historical range in India.

 In July 2022, the Reserve Bank of India (RBI) approved international trade settlements in
Indian rupees (Rs.) in order to promote the growth of global trade with emphasis on exports
from India and to support the increasing interest of the global trading community.

 The Agnipath Scheme aims to develop a young and skilled armed force backed by an
advanced warfare technology scheme by providing youth with an opportunity to serve Indian
Army for a 4-year period. It is introduced by the Government of India on June 14th, 2022.

 In June 2022, Prime Minister Mr. Narendra Modi inaugurated and laid the foundation stone
of development projects worth Rs. 21,000 crore (US$ 2.63 billion) at Gujarat Gaurav
Abhiyan at Vadodara.

 Mr. Rajnath Singh, Minister of Defence, launched 75 newly developed Artificial Intelligence
(AI) products/technologies during the first-ever „AI in Defence‟ (AIDef) symposium and
exhibition organized by the Ministry of Defence in New Delhi on July 11th, 2022.

 In June 2022, Prime Minister Mr. Narendra Modi laid the foundation stone of 1,406 projects
worth more than Rs. 80,000 crore (US$ 10.01 billion) at the ground-breaking ceremony of
the UP Investors Summit in Lucknow. The Projects encompass diverse sectors like
Agriculture and Allied industries, IT and Electronics, MSME, Manufacturing, Renewable
Energy, Pharma, Tourism, Defence & Aerospace, and Handloom & Textiles.

 The Indian Institute of Spices Research (IISR) under the Indian Council for Agricultural
Research (ICAR) inked a Memorandum of Understanding (MoU) with Lysterra LLC, a
Russia-based company for the commercialization of bio capsule, an encapsulation technology
for bio-fertilization on June 30th, 2022.

 As of April 2022, India signed 13 Free Trade Agreements (FTAs) with its trading partners
including major trade agreements like the India-UAE Comprehensive Partnership Agreement

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 (CEPA) and the India-Australia Economic Cooperation and Trade Agreement (IndAus
ECTA).

 'Mission Shakti' was applicable with effect from April 1st, 2022, aimed at strengthening
interventions for women‟s safety, security, and empowerment.

 The Union Budget of 2022-23 was presented on February 1st, 2022, by the Minister for
Finance & Corporate Affairs, Ms. Nirmala Sitharaman. The budget had four priorities PM
GatiShakti, Inclusive Development, Productivity Enhancement and Investment, and
Financing of Investments. In the Union Budget 2022-23, effective capital expenditure is
expected to increase by 27% at Rs. 10.68 trillion (US$ 142.93 billion) to boost the economy.
This will be 4.1% of the total Gross Domestic Production (GDP).

 Strengthening of Pharmaceutical Industry (SPI) was launched in March 2022 by the Ministry
of Chemicals & Fertilisers to provide credit linked capital and interest subsidy for
Technology Upgradation of MSME units in pharmaceutical sector, as well as support of up to
Rs. 20 crore (US$ 2.4 million) each for common facilities including Research centre, testing
labs and ETPs (Effluent Treatment Plant) in Pharma Clusters, to enhance the role of MSMEs.

 Under PM GatiShakti Master Plan, the National Highway Network will develop 25,000 km
of new highways network, which will be worth Rs. 20,000 crore (US$ 2.67 billion). In 2022-
23. Increased government expenditure is expected to attract private investments, with a
production-linked incentive scheme providing excellent opportunities. Consistently proactive,
graded, and measured policy support is anticipated to boost the Indian economy.

 In February 2022, The Ministry of Social Justice & Empowerment launched the Scheme for
Economic Empowerment of Denotified/Nomadic/SemiNomadic tribal communities (DNTs)
(SEED) to provide basic facilities like good quality coaching, and health insurance.
livelihoods initiative at a community level and financial assistance for the construction of
houses.

 In February 2022, Minister for Finance and Corporate Affairs Ms. Nirmala Sitharaman said
that productivity linked incentive (PLI) schemes would be extended to 14 sectors to achieve
the mission of AtmaNirbhar Bharat and create 60 lakh jobs with an additional production
capacity of Rs. 30 trillion (US$ 401.49 billion) in the next five years.

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 In the Union Budget of 2022-23, the government announced funding for the production-
linked incentive (PLI) scheme for domestic solar cells and module manufacturing of Rs.
24,000 crore (US$ 3.21 billion).

 In the Union Budget of 2022-23, the government announced a production-linked incentive

(PLI) scheme for Bulk Drugs which was an investment of Rs. 2,500 crore (US$ 334.60
million).

 In the Union Budget of 2022, Minister for Finance & Corporate Affairs Ms. Nirmala
Sitharaman announced that a scheme for design-led manufacturing in 5G would be launched
as part of the PLI scheme.

 In September 2021, Union Cabinet approved major reforms in the telecom sector, which are
expected to boost employment, growth, competition, and consumer interests. Key reforms
include rationalization of adjusted gross revenue, rationalization of bank guarantees (BGs),
and encouragement of spectrum sharing.

 In the Union Budget of 2022-23, the government has allocated Rs. 44,720 crore (US$ 5.98
billion) to Bharat Sanchar Nigam Limited (BSNL) for capital investments in the 4G
spectrum.

 Minister for Finance & Corporate Affairs Ms. Nirmala Sitharaman allocated Rs. 650 crore
(US$ 86.69 million) for the Deep Ocean mission that seeks to explore vast marine living and
non-living resources. Department of Space (DoS) has got Rs. 13,700 crore (US$ 1.83 billion)
in 2022-23 for several key space missions like Gaganyaan, Chandrayaan-3, and Aditya L-1
(sun).

 In May 2021, the government approved the production-linked incentive (PLI) scheme for
manufacturing advanced chemistry cell (ACC) batteries at an estimated outlay of Rs. 18,100
crore (US$ 2.44 billion); this move is expected to attract domestic and foreign investments
worth Rs. 45,000 crore (US$ 6.07 billion).

 Minister for Finance & Corporate Affairs Ms. Nirmala Sitharaman announced in the Union
Budget of 2022-23 that the Reserve Bank of India (RBI) would issue Digital Rupee using
blockchain and other technologies.

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 In the Union Budget of 2022-23, Railway got an investment of Rs. 2.38 trillion (US$ 31.88
billion) and over 400 new high-speed trains were announced. The concept of "One Station,
One Product" was also introduced.

 To boost competitiveness, Budget 2022-23 has announced reforming the 16-year-old Special
Economic Zone (SEZ) act.

 In June 2021, the RBI (Reserve Bank of India) announced that the investment limit for FPI
(foreign portfolio investors) in the State Development Loans (SDLs) and government
securities (G-secs) would persist unaffected at 2% and 6%, respectively, in FY22.

 In November 2020, the Government of India announced Rs. 2.65 trillion (US$ 36 billion)
stimulus package to generate job opportunities and provide liquidity support to various
sectors such as tourism, aviation, construction, and housing. Also, India's cabinet approved
the production-linked incentives (PLI) scheme to provide ~Rs. 2 trillion (US$ 27 billion) over
five years to create jobs and boost production in the country.

 Numerous foreign companies are setting up their facilities in India on account of various
Government initiatives like Make in India and Digital India. Prime Minister of India Mr.
Narendra Modi launched the Make in India initiative with an aim to boost the country's
manufacturing sector and increase the purchasing power of the average Indian consumer,
which would further drive demand and spur development, thus benefiting investors. The
Government of India, under its Make in India initiative, is trying to boost the contribution
made by the manufacturing sector with an aim to take it to 25% of the GDP from the current
17%. Besides, the government has also come up with the Digital India initiative, which
focuses on three core components: the creation of digital infrastructure, delivering services
digitally, and increasing digital literacy.

 On January 29th, 2022, the National Asset Reconstruction Company Ltd (NARCL) will
acquire bad loans worth up to Rs. 50,000 crore (US$ 6.69 billion) about 15 accounts by
March 31st, 2022. India Debt Resolution Co. Ltd (IDRCL) will control the resolution
process. This will clean up India's financial system and help fuel liquidity and boost the
Indian economy.

 National Bank for Financing Infrastructure and Development (NaBFID) is a bank that will
provide non-recourse infrastructure financing and is expected to support projects from the

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 first quarter of FY23; it is expected to raise Rs. 4 trillion (US$ 53.58 billion) in the next three
years.

 By November 1st, 2021, India, and the United Kingdom hope to begin negotiations on a free
trade agreement. The proposed FTA between these two countries is likely to unlock business
opportunities and generate jobs. Both sides have renewed their commitment to boost trade in
a manner that benefits all.

 In August 2021, Prime Minister Mr. Narendra Modi announced an initiative to start a national
mission to reach the US$ 400 billion merchandise export target by FY22.

 In August 2021, Prime Minister Mr. Narendra Modi launched a digital payment solution, e-
RUPI, a contactless and cashless instrument for digital payments.

 In April 2021, Dr. Ahmed Abdul Rahman AlBanna, Ambassador of the UAE to India and
Founding Patron of IFIICC, stated that trilateral trade between India, the UAE and Israel is
expected to reach US$ 110 billion by 2030.

 India is expected to attract investment of around US$ 100 billion in developing the oil and
gas infrastructure during 2019-23.

 The Government of India is expected to increase public health spending to 2.5% of the GDP
by 2025.

ROAD AHEAD3
In the second quarter of FY24, the growth momentum of the first quarter was sustained, and
high-frequency indicators (HFIs) performed well in July and August of 2023. India's
comparatively strong position in the external sector reflects the country's generally positive
outlook for economic growth and rising employment rates. India ranked 5th in foreign direct
investment inflows among the developed and developing nations listed for the first quarter of
2022.

India's economic story during the first half of the current financial year highlighted the
unwavering support the government gave to its capital expenditure, which, in 2023-24, stood
37.4% higher than the same period last year. In the budget of 2023-24, capital expenditure
took lead by steeply increasing the capital expenditure outlay by 37.4 % in BE 2023-24 to
Rs.10 lakh crore (US$ 120.12 billion) over Rs. 7.28 lakh crore (US$ 87.45 billion) in RE

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2022-23. The ratio of revenue expenditure to capital outlay increased by 1.2% in the current
year, signalling a clear change in favour of higher-quality spending. Stronger revenue
generation because of improved tax compliance, increased profitability of the company, and
increasing economic activity also contributed to rising capital spending levels. Further, In the
interim budget for FY24, Government increased FY25 Capex outlay to record Rs.11.11 lakh
crore (US$ 133.5 billion).

Since India‟s resilient growth despite the global pandemic, India's exports climbed at the
second-highest rate with a year-over-year (YoY) growth of 8.39% in merchandise exports
and a 29.82% growth in service exports till April 2023. With a reduction in port congestion,
supply networks are being restored. The CPI-C inflation reduction from June 2022 already
reflects the impact. In September 2023 (Provisional), CPI-C inflation was 5.02%, down from
7.01% in June 2022. With a proactive set of administrative actions by the government,
flexible monetary policy, and a softening of global commodity prices and supply-chain
bottlenecks, inflationary pressures in India look to be on the decline overall.

GOVERNMENT SCHEMES

 Pradhan Mantri Jan Dhan Yojana (PMJDY):

Hon‟ble Prime Minister announced Pradhan Mantri Jan Dhan Yojana as the National
Mission on Financial Inclusion in his Independence Day address on 15th August
2014, to ensure comprehensive financial inclusion of all the households in the country
by providing universal access to banking facilities with at least one basic bank
account to every household, financial literacy, access to credit, insurance and pension
facility. Under this, a person not having a savings account can open an account
without the requirement of any minimum balance and, in case they self-certify that
they do not have any of the officially valid documents required for opening a savings
account, they may open a small account. Further, to expand the reach of banking
services, all of over 6 lakh villages in the country were mapped into 1.59 lakh Sub
Service Areas (SSAs), with each SSA typically comprising of 1,000 to 1,500
households, and in the 1.26 lakh SSAs that did not have a bank branch, Bank Mitras
were deployed for branchless banking.

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  From Jan Dhan to Jan Suraksha:

For creating a universal social security system for all Indians, especially the poor and
the under-privileged the Hon‟ble Prime Minister launched three Social Security
Schemes in the Insurance and Pension sectors on 9th of May, 2015.

 Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY):

The PMJJBY is available to people in the age group of 18 to 50 years having a bank
account who give their consent to join / enable auto-debit. Aadhar is the primary KYC
for the bank account. The life cover of Rs. 2 lakh is for the one year period stretching
from 1st June to 31st May and is renewable. Risk coverage under this scheme is for
Rs. 2 lakh in case of death of the insured, due to any reason. The premium is Rs. 330
per annum which is to be auto-debited in one installment from the subscriber‟s bank
account as per the option given by him on or before 31st May of each annual
coverage period under the scheme. The scheme is being offered by the Life Insurance
Corporation and all other life insurers who are willing to offer the product on similar
terms with necessary approvals and tie up with banks for this purpose. As on 31st
March, 2019, cumulative gross enrollment reported by banks subject to verification of
eligibility, etc. is over 5.91 crore under PMJJBY.

 Pradhan Mantri Suraksha Bima Yojana (PMSBY):

The Scheme is available to people in the age group 18 to 70 years with a bank account
who give their consent to join / enable auto-debit on or before 31st May for the
coverage period 1st June to 31st May on an annual renewal basis. Aadhar would be
the primary KYC for the bank account. The risk coverage under the scheme is Rs. 2
lakh for accidental death and full disability and Rs. 1 lakh for partial disability. The
premium of Rs.12 per annum is to be deducted from the account holder‟s bank
account through „auto-debit‟ facility in one instalment. The scheme is being offered
by Public Sector General Insurance Companies or any other General Insurance
Company who are willing to offer the product on similar terms with necessary
approvals and tie up with banks for this purpose.

 Atal Pension Yojana (APY):

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APY was launched on 9th May, 2015 by the Prime Minister. APY is open to all
saving bank/post office saving bank account holders in the age group of 18 to 40
years and the contributions differ, based on pension amount chosen. Subscribers
would receive the guaranteed minimum monthly pension of Rs. 1,000 or Rs. 2,000 or
Rs. 3,000 or Rs. 4,000 or Rs. 5,000 at the age of 60 years.

Under APY, the monthly pension would be available to the subscriber, and after him
to his spouse and after their death, the pension corpus, as accumulated at age 60 of the
subscriber, would be returned to the nominee of the subscriber. The minimum pension
would be guaranteed by the Government, i.e., if the accumulated corpus based on
contributions earns a lower than estimated return on investment and is inadequate to
provide the minimum guaranteed pension, the Central Government would fund such
inadequacy. Alternatively, if the returns on investment are higher, the subscribers
would get enhanced pensionary benefits.

 Pradhan Mantri Mudra Yojana:

The scheme was launched on 8th April 2015. Under the scheme a loan of upto Rs.
50,000 is given under sub-scheme „Shishu‟; between Rs. 50,000 to 5.0 Lakhs under
sub- scheme „Kishore‟; and between 5.0 Lakhs to 10.0 Lakhs under sub-scheme
„Tarun‟. Loans taken do not require collaterals. These measures are aimed at
increasing the confidence of young, educated or skilled workers who would now be
able to aspire to become first generation entrepreneurs; existing small businesses, too,
will be able to expand their activates. As on 31.03.2019, Rs. 3,21,722 crores
sanctioned (Rs. 142,345 cr. - Shishu, Rs. 104,386 cr. Kishore and Rs. 74,991 cr. -
Tarun category), in 5.99 crores accounts.

 Stand Up India Scheme:

Government of India launched the Stand Up India scheme on 5th April, 2016. The
Scheme facilitates bank loans between Rs.10 lakh and Rs.1 crore to at least one
Scheduled Caste/ Scheduled Tribe borrower and at least one Woman borrower per
bank branch for setting up greenfield enterprises. This enterprise may be in
manufacturing, services or the trading sector. The scheme which is being
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implemented through all Scheduled Commercial Banks is to benefit at least 2.5 lakh
borrowers. The scheme is operational and the loan is being extended through
Scheduled Commercial Banks across the country. Stand Up India scheme caters to
promoting entrepreneurship amongst women, SC & ST category i.e those sections of
the population facing significant hurdles due to lack of advice/mentorship as well as
inadequate and delayed credit. The scheme intends to leverage the institutional credit
structure to reach out to these underserved sectors of the population in starting
greenfield enterprises. It caters to both ready and trainee borrowers.

 Pradhan Mantri Vaya Vandana Yojana:

The „Pradhan Mantri Vaya Vandana Yojana (PMVVY) has been launched by the
Government to protect elderly persons aged 60 years and above against a future fall in
their interest income due to uncertain market conditions, as also to provide social
security during old age. The scheme is implemented through the Life Insurance
Corporation of India (LIC) and open for subscription upto 31st March, 2023.
PMVVY offers an assured rate of return 7.40% per annum for the financial year
2020-21 for policy duration of 10 years. In subsequent years, while the scheme is in
operation, there will be annual reset of assured rate of return with effect from April
1st of the financial year in line with applicable rate of return of Senior Citizens Saving
Scheme (SCSS) upto a ceiling of 7.75% with fresh appraisal of the scheme on breach
of this threshold at any point.

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 LITERATURE REVIEW
Reynolds Norman and Sunder Pushpa 1 (1977) have observed, in a country as
large, poor and populous as India a scheme like MEGS is of great interest. It is
generally accepted that the direct redistributive effect of the EGS is indeed
substantial. That, in turn, raises further questions. The increase in wage payments to
the poor can be expected to increase the demand for consumer goods. A similar
concern to about the production of consumer goods relates to food policy. India today
has benefited from good crop seasons in a row. The large stock of food grain and low
level of inflation provide a degree of confidence in the management of the EGS. If the
inflation and food stock positions were to alter unfavorably, Maharashtra‟s claim on
available food stocks for distribution in the countryside against wage payments on
rural works test the national political support for Programmes of this type.
Fortunately, India‟s large foreign exchange surplus suggests that no serious conflict
should arise in the foreseeable future on this point between the interests of
Maharashtra and the rest of the country, certainly not unless world food prices steeply
rise once again

Dandekar Kumudini and Sathe Manju 2 (1980), have examined, the food for work
Programme in 1978-79 helped to get an increase of 33 Per Cent and more in the EGS
earnings of the workers and was considered the greatest attraction of EGS. Farm
landless households men and women came almost in same numbers. But with even
small land holdings men worked on their own farms letting their females work on
EGS. There was also a feeling. Sometimes that EGS work was easy. Since there was
not much of the supervision. If wage rates were the same for males and females, and
if males could get higher wages elsewhere, why not females work on EGS? Such was
the attitude of villagers on some projects. The age distribution of the males and
females working on EGS is worth nothing. This distribution is compared here with
that of the general population of workers, in the 1971 census of rural Maharashtra.
Form the age distribution is seems that both in the case of males and females, those
who were just entering the labor force, or those who had entered it perhaps
unsuccessfully slightly earlier, were working on EGS. From age years 40 and up they
30 were less prone to work on this scheme. Thus the socio-economic status of the

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EGS workers more or less conformed to what can be called „poor‟ and they needed
employment the most. However, that „poverty‟ of 1978-79 was curbed by EG.

Bagchee 3 (1984) has examined the provisions of the scheme and discusses some of
the important issues involved in its planning and implementation which have a
bearing on the realization of its objectives. The main doubt raised in this paper is
whether the scheme has not perhaps outreached itself by extending a guarantee of
employment to too large a section to population thereby affecting the goal of
productivity and also raising problems of manageability. It points out that straddling
the twin objectives of employment generation and increasing productivity can only be
feasible if the focus of the scheme is on poverty amelioration and both these
objectives are seen from this view-point. This requires devising suitable procedures
for planning, monitoring and evaluation from this perspective. These doubts arise not
from merely theoretical concerns but out of the practical problems that arise while
administering the EGS in the field and which require to be resolved by suitable policy
decision as recommended.

Katke 4 (1987) in his Dissertation the fact that, Sangola taluka ranks first in the
performance of EGS works needs further investigation particularly, in respect of its
employment effect have studied the same with particular reference to implementation
of catchments area development Programme in 45 selected villages in Sangola taluka
for the development of small farmers

Ezekiel Hannan and Stuyt Johann 7 (1990) study analyzes the geographical 32
distribution of EGS in Maharashtra in order to examine to what extent the scheme has
been responsive to the unmet employment need reflected in the agro-ecological and
other economic conditions affecting their employment opportunities relative to the
growth of their labor force. If increased investment alone is to be relied upon to bring
about the increase in the rate of growth of regular employment, the proportionate
increase in investment required – will of course be equal to the proportionate increase
in the latter rate of growth that is needed. Even this will be small for the reasons set
out above. However, if attention is concentrated on increasing the effectiveness of
investment in these districts, and in particular on obtaining greater long-term returns
from the EGS expenditure on projects and from complementarities between different
projects and Programmes, the required growth in regular employment opportunities

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may be obtained without much increase in investment. A rapid decline in EGS
employment in these districts can then be achieved, with powerful effects on the total
volume of employment that has to be provided in the state under the EGS.

Bhende, Walker, Lieberman and Venkataram 8 (1992) in their paper attempt to

analyze the role of EGS in augmenting the wage income of rural households, its
performance in terms of targeting the poor from the non poor and also its relationship
with farm employment. To sum up, they find that the EGS provides employment
when farm and off-farm employment opportunities are inadequate to absorb idle labor
force in the rural areas. The scheme succeeded in targeting the poor from non-poor.
The scheme was unable to make any significant dent on the prevalence of poverty
parse never the less; it has helped in reducing the severity of poverty by augmenting
the incomes of the rural poor.

Mahendra Dev 10 (1995) studied that the EGS alone cannot remove the poverty in
rural areas of the state. And any replication of the scheme in other states should
involve prior establishment of decentralized district planning and implementing body
and assurance of adequate funds through additional taxation. While examining
poverty alleviation Programmes for the rural poor in Maharashtra. The article made
and attempt to a) analyze its macroeconomic, demographic, political and institutional
dimensions, b) examine characteristics of poverty, c) assess the major anti-poverty
Programmes in the state, and d) critically evaluate the EGS. Given all the limitations
in the EGS design and implementation, many studies have shown that the EGS has
made positive impact on the levels of living of the rural poor in Maharashtra. The
person day unemployment rate based on NSS declined considerably over time in the
state. The performance of EGS in terms of employment creation, raising incomes of
the poor and checking leakages is much better than any other antipoverty Programmes
in India. There are also many indirect benefits due to the scheme. The incidence of
poverty is quite high in the state as compared to many other states. The indebtedness
level is also quite high among agricultural labors in the state. The solution to poverty
alleviation in Maharashtra in the medium and long term lies in the development and
adoption of suitable technologies to make the poor in the dry land communities
economically viable by improving the productivity of their agriculture.

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Ganesh-Kumar Mishra Srijit. and Panda Manoj14 (2004), in a study reports the
finding that the proposed act at the national level mentions payments of compensation
at one-third of the applicable wage, which is to be met by the respective 36 state
government. The feature where the liability for compensation is on the states (which
has the responsibility to implement) is a potentially useful means of ensuring efficient
implementation. Claims for compensation can in fact be used as a means to monitor
Programme delivery. The proposed act goes beyond just monitoring and in fact
suggests imposing monetary liability or imprisonment of the concerned Programme
officers in such instances. Using instances of claims of compensation to penalize the
implementing authority could lead to undesirable consequences such as not
registering claims for compensation, registering false claims for compensation as a
means to settle scores etc. This can act as a deterrent to get able and committed
officials posted for such operations. However, accountability of the officials and
agencies involved should be adhered to under normal government rules. At the end, it
may be mentioned here that there has not been an independent statewide evaluation of
the functioning of the MEGS in recent years. Such a contemporary evaluation would
help in drawing further lessons for the proposed National Employment Guarantee
Programme (NEGP).

Papola 15 (2005) contends that an employment Programme should ensure provision

of work to everyone who is in need. It is to be provided not as a dole nor as a
privilege but as payment for labor employed. The author opines that limit of 100 days
of employment per households is unnecessary. The two pertinent points to be kept in
view are; wage rates to be fixed to satisfy the basic needs of the households of the
workers and the work assignment to the really poor and needy households. The author
concludes that diversion of rural labor from other productive activities is not to
encouraged

Ghosh Jayati 16 (2005) stated that, ultimately the EGA is a major move in the right
direction. It can provide much-needed employment for the rural poor and can become
the basis for the necessary regeneration of the rural economy, without which
sustainable aggregate growth is not possible. While it is not as comprehensive
guarantee as might have been wished, there is no doubt that the NREGA even in its
present form represents a major landmark, probably one of the more historic pieces of
legislation in independent India. If it is implemented even partially, it could have very

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substantial positive effects on the rural economy, which is currently in the grip of an
37 unprecedented agrarian crisis, with enormous levels of open and disguised
unemployment and very large shortage of opportunities for productive income
generation. The mobilization of exiting surplus labor in the countryside is likely to
generate very positive effects in terms of freeing productive forces and generating
more economic growth. It is also likely to change the balance of class forces in the
countryside, at least to some extent, which is one of the reasons why there has been so
much opposition to this legislation. But for any of this to happen, there is need for
very vigilant and constant civil society engagement with the process, and in particular
very extensive social and political mobilization across the rural areas to ensure
effective implementation. If this happens, the Indian experience can indeed serve as a
model for the rest of the world.

Gupta Smita 17 (2005) has attempted, the divergent approaches to fiscal policy gave
rise to often irreconcilable differences on aspects such as piece rate work, type of
works, wages, targeting, individual entitlements, central liability, etc. It also created
the paradox of an anti-peasant support to the EGS and an anti-subsidy support to
expansion in rural employment expenditure. Unfortunately, this nature of support
only serves to strength neo-liberal economic policy besides implying dire
consequences for the peasantry. With growth rates of rural income, employment and
production already low and falling, an additional decline in public spending will
further incapacitate rural India. The EGS on the other hand has the potential of
turning around the agrarian distress and generating growth. It would mobilize surplus
labor and unleash productive forces. For this reason, proponents of the same
neoliberal policies are likely to exert pressure on the government to narrow the
scheme, to underestimate demand, to utilize the corporate press to highlight cases of
corruption as a justification to suspend the scheme. Therefore, advocates need to
remain vigilant and mobilize the rural poor to prevent global finance form engineering
a confidence crises or fiscal crisis to subvert the scheme.

Gupta Smita 17 (2005) has attempted, the divergent approaches to fiscal policy gave
rise to often irreconcilable differences on aspects such as piece rate work, type of
works, wages, targeting, individual entitlements, central liability, etc. It also created
the paradox of an anti-peasant support to the EGS and an anti-subsidy support to
expansion in rural employment expenditure. Unfortunately, this nature of support

25 | P a g e
only serves to strength neo-liberal economic policy besides implying dire
consequences for the peasantry. With growth rates of rural income, employment and
production already low and falling, an additional decline in public spending will
further incapacitate rural India. The EGS on the other hand has the potential of
turning around the agrarian distress and generating growth. It would mobilize surplus
labor and unleash productive forces. For this reason, proponents of the same
neoliberal policies are likely to exert pressure on the government to narrow the
scheme, to underestimate demand, to utilize the corporate press to highlight cases of
corruption as a justification to suspend the scheme. Therefore, advocates need to
remain vigilant and mobilize the rural poor to prevent global finance form engineering
a confidence crises or fiscal crisis to subvert the scheme. Ghosh Dilip Kumar 18
(2005) states that, it is ver

Srinivasa Rao, Didde et. al 70(2013) have taken Buduruvada village of Parvatipuram
mandal in the agency area of Vijayanagaram district in Andhra Pradesh. To examine
the extent to which NREGA has benefitted the tribal‟s in terms of employment, asset
creation and wage employment. The study reveals that the awareness of the tribal‟s as
to MGNREGA is limited. Further, it is observed that employment days have been 24-
25 and unemployment allowance has not been paid. There has been delay in the
payment of wages by 20-30 days. It is noted that the daily wage has been in the range
of Rs.50-90. The authors opine that policy interventions are needed to benefit the SC
and ST workers, especially in the backwards areas

Keshava72 (2014) has examined effective implementation of the scheme rests on the
simple philosophy that ordinary people will go to great lengths to procure their
entitlements given the space to do so. Apart from systematic corruption we are all
aware of the chronic inefficiency, unwillingness and incapacities of the bureaucratic
system to deliver entitlements for the poor. There is a strong and immediate need to
formulate rules to operationlize provisions in the Act which include guaranteeing 63
grievances redressed in seven days, social audit twice a year and mandatory
transparency and proactive disclosure. Properly incorporated and enforced, a
comprehensive set of operational values could strengthen the entitlement frame work
and fix the responsibility at every level. Such a system would enable bottom up
pressure for implementation which should be matched by a strong political mandate.
The NREGA has millions of workers with unresolved and unaddressed grievances

26 | P a g e
and problems to be dealt with. A response system could radically improve NREGS
and can impact and transform the face of rural governance. A critical lacuna in the
implementation of NREGS has been the shortage of dedicated human resource. With
an overloaded bureaucratic structure it will only solve part of the problem

Navneet Seth 78 (2015) analyzes the importance of the Programme in India. The
Central Government has been contributing huge capital on the scheme and also stated
that the Programme expenditure will be enhanced year by year. The paper has
examined the negative and positive side results of the Programme. The study states
that most of the women workers participate in the Programme. Corruption and
discrimination in the non availability of work, delay in issuing of job cards,
distribution of work had been identified. Finally this analysis found that performance
of the Programme in several parts of India has been satisfactory.

Gangadhara Reddy 79 (2015) study reviews the problems of India, Viz., illiteracy,
low level of communications, drought, farmer‟s suicides, unemployment and poverty
are the challenging issues in India and analysis the significance of the Programme
which provide one of the largest employment Programmes in the world providing
work for 5 crore rural people. Also this study recommends the measures to make
NREGA more effective.

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 RESEARCH METHODOLOGY

This research project investigates the impact of government schemes on the Indian economy.
It aims to analyze the effectiveness of these initiatives in achieving their intended goals and
contributing to broader economic development.

1. Research Design

This study will employ a mixed-method approach, combining both quantitative and
qualitative data collection methods.

 Quantitative Data: This data will involve statistical analysis of economic indicators like
GDP growth, poverty rates, and sectoral performance. We will utilize secondary data sources
such as government reports, World Bank databases, and economic surveys conducted by
research institutions.

 Qualitative Data: This data will provide deeper insights into the experiences and
perspectives of stakeholders. We will conduct semi-structured interviews with:
o Government officials involved in designing and implementing schemes.
o Beneficiaries of various schemes across different sectors (e.g., farmers, rural workers,
students).
o Industry experts and economists to understand the broader economic impact.

2. Sample Selection

 Quantitative Data: We will employ purposive sampling to select relevant government

reports and economic surveys that focus on the specific schemes under investigation.

 Qualitative Data: We will use a combination of purposive and snowball sampling.

Purposive sampling will identify key government officials and industry experts. Snowball
sampling will leverage initial interview participants to suggest subsequent interviewees from

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 their networks. The sample size will be determined by reaching saturation, where no new
insights emerge from further interviews.

3. Data Collection Methods

 Quantitative Data Analysis: Secondary data will be analyzed using statistical software like
STATA or R. We will employ descriptive statistics to understand trends and correlations
between scheme implementation and economic indicators. Econometric models can be used
to assess the causal impact of specific schemes, considering potential confounding factors.

 Qualitative Data Collection: Semi-structured interviews will be conducted in person or

online depending on participant availability. An interview guide will be developed with open-
ended questions to capture the lived experiences of beneficiaries and the perspectives of
policymakers and experts.

4. Data Analysis Methods

 Qualitative Data Analysis: Thematic analysis will be used to identify recurring themes and
patterns in the interview transcripts. This will involve coding interview data, categorizing
themes, and interpreting their significance in relation to the research objectives.

 Data Integration: The quantitative and qualitative data will be triangulated to create a more
comprehensive understanding. This might involve using quantitative findings to contextualize
qualitative data and vice versa.

5. Ethical Considerations

 Informed consent will be obtained from all participants before conducting interviews.
Participation will be voluntary, and anonymity will be assured.
 Interview recordings and transcripts will be stored securely and confidentially.
 Data will be analyzed and reported ethically, avoiding any misrepresentation or bias.

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 6. Expected Outcomes

This research aims to provide a nuanced understanding of the impact of government schemes
on the Indian economy. The findings are expected to:

 Identify the effectiveness of various schemes in achieving their intended goals.

 Analyze the broader economic consequences of government interventions.
 Provide valuable insights for policymakers to improve the design and implementation of
future schemes.

This research methodology provides a framework for investigating the impact of government
schemes on the Indian economy. By employing a mixed-method approach and adhering to
ethical considerations, the study aims to contribute valuable insights to inform policy
decisions and promote sustainable economic development.

RESEARCH HYPOTHESES

This research project investigates the impact of government schemes on the Indian economy,
focusing on both positive contributions and potential drawbacks. Here are some key
hypotheses to be explored:

1. Poverty Reduction and Social Welfare:

 Hypothesis 1a: Social welfare schemes (e.g., MGNREGA, PDS) will have a positive impact
on poverty reduction, particularly in rural areas, by providing a safety net and increasing
household incomes.
 Hypothesis 1b: However, the effectiveness of these schemes might be limited by issues like
targeting errors, corruption, and leakages, potentially hindering their overall impact on
poverty reduction.

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 2. Infrastructure Development and Economic Growth:

 Hypothesis 2a: Investment in infrastructure development schemes (e.g., PMGSY,

Bharatmala) will improve connectivity, facilitate the movement of goods and people, and
stimulate economic activity in targeted regions.

 Hypothesis 2b: The long-term sustainability of these schemes might be a concern, especially
if they rely heavily on government funding. Additionally, delays in project completion due to
bureaucratic hurdles could limit their economic impact.

3. Skill Development and Employability:

 Hypothesis 3a: Skill development schemes (e.g., PMKVY) will enhance the employability
of the workforce by equipping individuals with industry-relevant skills, leading to higher
employment rates and improved living standards.

 Hypothesis 3b: The effectiveness of these schemes might be limited by the relevance of
training programs to actual job market demands. Additionally, ensuring quality training and
placement opportunities could be a challenge.

4. Agricultural Growth and Food Security:

 Hypothesis 4a: Investment in agricultural development schemes (e.g., PMKSY, PMFBY)

will lead to increased agricultural productivity, improve farmer incomes, and contribute to
national food security.

 Hypothesis 4b: The success of these schemes might depend on factors like ensuring timely
access to subsidized inputs, addressing issues of water scarcity, and promoting sustainable
farming practices.

These hypotheses provide a starting point for the research. By analyzing both quantitative and
qualitative data, the study will aim to confirm, refine, or even reject these hypotheses,

31 | P a g e
 providing a more comprehensive understanding of the complex relationship between
government schemes and the Indian economy. The research will also consider potential
spillover effects, where a scheme's impact extends beyond its intended target group or sector.

OBJECTIVE OF THE STUDY:

The Indian economy, characterized by its vast population and rapid development, heavily
relies on government initiatives to achieve inclusive growth and social progress. This
research study aims to comprehensively analyze the impact of government schemes on the
Indian economy. Our primary objective is to move beyond a simplistic binary of success or
failure and instead, shed light on the nuanced ways these schemes influence various sectors,
contribute to broader economic well-being, and potentially face challenges in their
implementation.

Specifically, the study seeks to achieve the following objectives:

1. Assess the Effectiveness of Social Welfare Schemes:

 Evaluate the extent to which social welfare programs like MGNREGA (Mahatma Gandhi
National Rural Employment Guarantee Act) and PDS (Public Distribution System) contribute
to poverty reduction, particularly in rural areas.
 Analyze how these schemes provide a safety net for vulnerable populations by increasing
household incomes and mitigating the impact of economic shocks.
 Identify potential limitations of these programs, such as targeting errors, inefficiencies in
delivery mechanisms, and leakages of resources, that might hinder their effectiveness.

2. Analyze the Economic Impact of Infrastructure Development:

 Investigate how investments in infrastructure development schemes like PMGSY (Pradhan

Mantri Gram Sadak Yojana) and Bharatmala translate into improved connectivity across the
nation.

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 Assess how enhanced infrastructure facilitates the movement of goods and people, stimulates
economic activity in targeted regions, and fosters trade and commerce.
 Evaluate the long-term financial sustainability of infrastructure projects, especially those
heavily reliant on government funding. Explore alternative financing models and public-
private partnerships to ensure continued development.
 Examine the impact of bureaucratic hurdles on project completion timelines and identify
strategies to streamline implementation processes.

3. Evaluate the Contribution of Skill Development Initiatives:

 Analyze the effectiveness of skill development schemes like PMKVY (Pradhan Mantri
Kaushal Vikas Yojana) in equipping the workforce with industry-relevant skills.
 Assess how these schemes bridge the skill gap, enhance employability, and contribute to
higher employment rates for program participants.
 Evaluate the extent to which training programs offered under these schemes align with actual
job market demands to ensure the skills acquired are readily applicable in the workforce.
 Examine the effectiveness of placement services offered by these programs in connecting
participants with suitable employment opportunities.

4. Investigate the Link Between Agricultural Schemes and Food Security:

 Analyze the impact of agricultural development schemes like PMKSY (Pradhan Mantri
Krishi Sinchai Yojana) and PMFBY (Pradhan Mantri Fasal Bima Yojana) on agricultural
productivity.
 Investigate how these schemes contribute to increased farm output, improved farmer
incomes, and ultimately, ensure national food security.
 Identify challenges faced by these schemes, such as ensuring timely access to subsidized
inputs like seeds and fertilizers, addressing issues of water scarcity, and promoting
sustainable farming practices.
 Explore ways to improve the efficiency and outreach of these schemes to empower small and
marginal farmers.

5. Unveil Spillover Effects and Unintended Consequences:

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 Beyond the immediate target groups and sectors, investigate the potential spillover effects of
government schemes. For example, how might a rural development scheme indirectly boost
demand for manufactured goods in urban areas?
 Identify any potential unintended consequences of government interventions, such as
dependence on subsidies or distortions in market mechanisms.

Overall Impact:

This research study aims to provide a comprehensive and nuanced understanding of the
impact of government schemes on the Indian economy. By employing a mixed-method
approach that combines quantitative data analysis with qualitative interviews from
stakeholders, the study will offer valuable insights for policymakers. These insights can be
used to:

 Improve the design and implementation of existing schemes to maximize their effectiveness.
 Develop new initiatives that address critical economic and social challenges faced by the
nation.
 Promote evidence-based policymaking for sustainable and inclusive economic growth in
India.

In conclusion, this research project goes beyond simply measuring success or failure. It seeks
to unveil the multifaceted impact of government schemes on the Indian economy, paving the
way for a more holistic and informed approach to economic development strategies.

THE NEED FOR STUDY

India's economic landscape is undergoing a dynamic transformation. With a burgeoning

population and aspirations for social progress, the role of government schemes in shaping the
nation's economic trajectory becomes increasingly crucial. This research project is driven by
a compelling need to comprehensively understand the impact of these schemes on various
sectors and the overall well-being of the Indian economy.

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1. Evaluating Effectiveness and Addressing Challenges:

Despite the noble intentions behind government schemes, their effectiveness in achieving
desired outcomes can be a subject of debate. This study is necessary to assess the real-world
impact of these schemes. Are they successfully alleviating poverty, enhancing infrastructure,
and empowering the workforce? Or are there inefficiencies and leakages hindering their
potential?

By analyzing quantitative data like poverty rates and sectoral growth alongside qualitative
insights from beneficiaries and policymakers, the research can identify challenges faced by
these schemes. Issues like targeting errors, corruption, bureaucratic hurdles, and skill
mismatch can be brought to light. This knowledge can then be used to refine existing
schemes, improve delivery mechanisms, and ensure resources reach the intended
beneficiaries.

2. Informing Policy Decisions and Resource Allocation:

Government resources are finite, and efficient allocation is critical for sustainable
development. This research can provide valuable evidence to guide policymakers in making
informed decisions about government schemes. Understanding the cost-effectiveness of
different schemes allows for prioritizing investments in areas with the highest potential
impact.

For example, the research might reveal that a specific agricultural scheme is highly successful
in boosting farm output but faces challenges in reaching small farmers. This insight can
inform policy decisions to streamline the program's outreach mechanisms and ensure
equitable access to its benefits.

3. Fostering Evidence-Based Policymaking:

35 | P a g e
Policymaking often relies on intuition and experience. This research, with its data-driven
approach, has the potential to move towards evidence-based policymaking. By analyzing the
impact of existing schemes, the study can identify successful strategies and areas for
improvement. This knowledge base can guide the development of future schemes, ensuring
they are tailored to address specific economic challenges faced by the nation.

4. Promoting Transparency and Accountability:

Transparency and accountability are essential for the success of any government intervention.
This research can contribute to these goals by shedding light on the actual impact of schemes
on the ground. By analyzing how schemes are implemented and utilized, the research can
identify areas where improvements are needed to ensure transparency and hold relevant
authorities accountable for efficient resource utilization.

5. Identifying Spillover Effects and Unintended Consequences:

Government schemes often have ripple effects beyond their immediate target groups. This
research can help identify these spillover effects, both positive and negative. For instance, a
rural development scheme might not only benefit rural communities but also stimulate
demand for manufactured goods in urban areas, contributing to overall economic growth.

On the other hand, the research can also unveil unintended consequences of certain schemes.
Subsidies, while intended to support specific sectors, might create dependence or distort
market mechanisms. Identifying these unintended consequences allows for corrective
measures to be taken, maximizing the positive impact of government interventions.

In conclusion, this research on the impact of government schemes on the Indian economy
addresses a critical need. By evaluating their effectiveness, informing policy decisions,
promoting transparency, and identifying both positive and negative consequences, the study
can contribute significantly to India's economic development journey. The research findings

36 | P a g e
 can empower policymakers with valuable insights to design and implement schemes that
achieve inclusive growth, social progress, and a brighter economic future for the nation.

THE SIGNIFICANCE OF STUDY

India's economic development hinges on the success of its government schemes. These
schemes, encompassing social welfare, infrastructure development, skill development, and
agricultural initiatives, represent a substantial investment in the nation's future.
Understanding their impact is crucial for maximizing their effectiveness and ensuring India's
economic trajectory remains sustainable and inclusive. This research project holds significant
value for various stakeholders.

1. Informing Policy Decisions and Optimizing Resource Allocation:

 Policymakers: This research provides valuable evidence to guide policymakers in making

informed decisions about government schemes. By analyzing the cost-effectiveness of
various programs, the study can help prioritize investments in areas with the highest potential
for positive social and economic outcomes. For instance, the research might reveal that a
particular skill development scheme is highly effective in enhancing employability but
struggles to reach geographically remote areas. This insight can inform policy decisions to
expand the program's reach and ensure it benefits a wider segment of the population.

 Government Agencies: The research findings can empower government agencies

responsible for implementing these schemes. By understanding the challenges faced by
existing programs (e.g., targeting errors, bureaucratic hurdles), these agencies can develop
targeted interventions to improve delivery mechanisms and ensure resources reach the
intended beneficiaries. Additionally, the research might identify areas where existing
schemes can be streamlined or consolidated for greater efficiency.

2. Promoting Evidence-Based Policymaking and Long-Term Sustainability:

37 | P a g e
 Shifting from Anecdotal Evidence: Policymaking often relies on experience and anecdotal
evidence. This research, with its data-driven approach, fosters a shift towards evidence-based
policymaking. Analyzing the impact of existing schemes allows for identification of
successful strategies and areas for improvement. This knowledge base can guide the
development and implementation of future schemes, ensuring they are tailored to address
specific economic challenges and promote long-term economic sustainability

3. Fostering Transparency and Accountability:

 Increased Public Trust: Transparency and accountability are essential for the success of any
government intervention. This research contributes to these goals by shedding light on how
schemes translate into real-world outcomes. By analyzing implementation processes and
resource utilization, the research can identify areas for improvement, leading to increased
public trust in government initiatives

 Holding Authorities Accountable: The research findings can be used to hold relevant
authorities accountable for efficient resource utilization. By highlighting potential leakages or
inefficiencies within certain schemes, the research empowers stakeholders to demand
corrective measures and ensure intended beneficiaries receive the full benefits of the
programs.

4. Identifying Spillover Effects and Mitigating Unintended Consequences:

 Maximizing Positive Impacts: Government schemes often have far-reaching effects beyond
their immediate target groups. This research can help identify these spillover effects, both
positive and negative. For instance, a rural infrastructure development scheme might not only
improve connectivity in rural areas but also stimulate demand for construction materials
produced in urban centers, fostering economic growth across diverse sectors.

 Mitigating Negative Consequences: The research can also unveil unintended consequences
of certain schemes. Subsidies, while intended as a form of support, might create dependence
on government aid or distort market mechanisms, hindering long-term economic growth.

38 | P a g e
 Identifying these consequences allows for timely interventions to mitigate negative impacts
and maximize the positive contributions of government schemes.

5. Contribution to Academic Discourse and Future Research:

 Expanding Knowledge Base: This research contributes to the existing body of knowledge
on the impact of government interventions in developing economies. By sharing findings
through academic publications and presentations, the research can stimulate further discourse
on effective policy design and implementation strategies for achieving inclusive and
sustainable economic growth.

 Guiding Future Research: The research methodology employed in this study can serve as a
valuable template for future research endeavors. By establishing a robust framework for
analyzing the impact of government schemes, the study paves the way for further
investigation into specific programs or the development of new evaluation methodologies,
enriching the understanding of government interventions in the Indian context..

 , this research on the impact of government schemes on the Indian economy holds significant
value for policymakers, government agencies, the public, and the academic community. By
providing valuable insights and fostering evidence-based policymaking, the research
contributes to maximizing the effectiveness of government interventions and ultimately,
propelling India towards a more prosperous

LIMITATION OF THE STUDY

While this research project strives to provide a comprehensive understanding of the impact of
government schemes on the Indian economy, it acknowledges several inherent limitations:

Data Availability and Reliability:

 Secondary Data: The study relies on secondary data sources like government reports and
economic surveys. The accuracy and completeness of this data can vary depending on the
source and collection methods. Inconsistencies or biases within the data could potentially
affect the analysis.

39 | P a g e
 Limited Scope: The sheer number and complexity of government schemes in India
necessitates focusing on a specific selection. This might limit the generalizability of findings
to the entire spectrum of government interventions.

Challenges of Sample Selection:

 Quantitative Data: Selecting a representative sample of government reports and economic
surveys can be challenging. Focusing on a specific timeframe or a particular set of schemes
might not capture the full picture.

 Qualitative Data: The selection of interviewees for semi-structured interviews, despite using
purposive and snowball sampling, might not fully represent the diverse experiences of
beneficiaries, policymakers, and experts across the nation. Selection bias could potentially
skew the qualitative data collected.

Methodological Considerations:

 Attributing Causality: The study employs a mixed-method approach, but establishing

definitive causal relationships between government schemes and economic outcomes can be
difficult. Many other factors can influence economic growth, poverty rates, and sectoral
performance, making it challenging to isolate the specific impact of a particular scheme.

 Shortcomings of Interviews: Semi-structured interviews rely on self-reported information,

which might be subject to recall bias or social desirability bias. Participants might not
accurately recall details or might provide answers they perceive as more favorable.

Ethical Considerations:

 Confidentiality: Maintaining the confidentiality of interview participants is crucial.

However, anonymizing interview data might limit the richness of the information and reduce
the context of participants' experiences.

40 | P a g e
 Researcher Bias: The researcher's own background and perspectives could unconsciously
influence the interpretation of data or the framing of interview questions. Reflexivity, or
being mindful of potential biases, is important to mitigate this limitation.

Time Constraints:

 Research Duration: The research is designed to be completed within a specific timeframe.

This might limit the depth of data collection and analysis, potentially hindering the
comprehensiveness of the findings.

Addressing the Limitations:

Despite these limitations, the research will employ strategies to mitigate their impact.
Triangulating quantitative and qualitative data can help to identify inconsistencies and
provide a more holistic understanding. Pilot testing interview questions and ensuring a
diverse pool of interviewees can enhance the quality of qualitative data. Transparency in
research methods and limitations will allow readers to critically evaluate the findings.

while limitations exist, this research project acknowledges their presence and outlines
strategies to minimize their influence. By acknowledging these limitations, the research
provides a more nuanced and realistic understanding of the impact of government schemes on
the Indian economy. The findings, even with limitations considered, can be valuable for
informing policy decisions, promoting transparency, and ultimately, contributing to more
effective government interventions that contribute to India's economic and social progress.

41 | P a g e
 DATA ANALYSIS AND INTERPRETATION

Chart1: Share of Private Final Consumption Expenditure in GDP

62
Percent

60

58

56
FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY23 (PE)
FY 21(2nd RE)

FY 22(1st RE)
FY 20(3rd RE)

FY 24(FAE)
54

Source : NSO ,Mo SPI

INTERPRETATION
The share of Private Final Consumption Expenditure(PFCE) in GD Pat current
prices increased from an average of 58.4 per cent in the eight years preceding
the onset of the pandemic to 60.8 per cent in the last three years ending FY24
(Chart 1).

.Chart2: Per Capita Real Gross National Income

150000

120000

90000
₹

60000

30000

0
FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY23 (PE)
FY 22(1st RE)
FY 21(2nd RE)
FY 20(3rd RE)

FY 24(FAE)

Source :NSO, Mo SPI

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INTERPRETATION

The secured consumption base resulted from the robust increase in Per Capita Real
Gross National Income (GNI) in the nine years preceding the onset of the pandemic.
The Per Capita Real GNI registered a compounded annual growth rate (CAGR) of 5.3
per cent from FY12 to FY20 (Chart 2). This is largely on account of the strong vision
and roadmap laid by the government, focusing on grow that the macro level,and
market- friend forms introduced that eased government regulations and gave the
private sector much-needed impetus to grow. The reduced compliance burden,
simplified laws, opening up various sectors, and strategic disinvestment of public
sector enterprises have given space and opportunities to the private sector to grow.

Chart3-TrendsinInvestmentrateovertheyears

Unsustainable credit boom Balance-sheet repair(corporate & Phase of

38 and bad debt mounting banks),risk aversion leading to growth and
reluctance in lending investment
36 recovery
34.3
33.2
Percent

34 35.8

32 31.3
30.7 29.8
29.5
30
28.5 28.929.2
28.2
28

26 27.3
FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24

Source : NSO, Mo SPI

INTERPRETATION

The investment climate in the country has transformed in recent years, leading to the
emergence of „investment‟ as a crucial driver of economic growth. The seemingly
impressive investment rate in the first decade of the millennium was based on
excessive borrowing and over-optimism, which eventually proved unsustainable. In
the second decade, banks were reluctant to lend to corporates, and the corporates, in
turn, had to trim their balance sheets by selling assets and paying off debts. Hence, the
investment share of GDP came down in the second decade. These stresses on the

43 | P a g e
balance sheets, which accumulated in the first decade, compounded the underlying
macro fragility of the Indian economy with a high fiscal deficit, high current account
deficit and sustained double-digit inflation, and the Indian economy was included in
the infamous club of „fragile-five‟ emerging economies. The government helped
banks strengthen their balance sheets by recapitalising them and restructuring the
industry. With stronger balance sheets in the non-financial corporate and banking
sectors, growth in investments and credit are poised to increase in this decade, as is
already evident in the data for the last three years (Charts 3 and 4).

Chart 4: Growth in Non-Food Bank Credit, Net of Personal Loans.

INTERPRETATION

The government's efforts over the past decade have resulted in positive economic
outcomes. With numerous investment-boosting reforms and healthier balance sheets,
private corporate investment has begun to crowd in, and banks are responding with
greater credit disbursement. The non-food bank credit growth, net of personal loans,
which had declined from above 20 per cent in 2008 to less than 10 per cent in FY
2016, has rebounded to reach 13 per cent in FY23 (Chart 4).

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Chart 5: Capital Expenditure by Public Sector (Centre + CPSEs)

INTERPRETATION

During the period of balance sheet retrenchment in the financial and non-financial
private corporate sector in the second decade of the new millennium, the Union
government took on the mantle of sustaining investment growth and, consequently,
employment generation in the economy. Effectively, the capital expenditure of the
Public sector (including Union government capex, grants to the states for capital asset
creation, and investment resources of the Central PSEs) has increased from ₹5.6 lakh
crore in FY15 to ₹18.6 lakh crore in FY24 (Chart 5). During this period, the surge in
capital expenditure was 5.1 times, grants to states for capital asset creation went up by
2.8 times and resources of PSEs increased by 2.1 times. To facilitate the upscaling of
capex, the Union government rebalanced its fiscal expenditure, with capital spending
rising from 12 per cent of total expenditure in FY18 to 22 per cent in FY24 (Budget
Estimate). Notably, even during the pandemic years, when the spending was carefully
targeted to cater to the basic needs of the population at the bottom of the pyramid, the
government could create the fiscal space to continue the emphasis on its capex. The
emphasis on infrastructure investments has further addressed the supply-side
deficiencies that have bedevilled the Indian economy for a long time.

45 | P a g e
Chart 6: Rising Investment by Private Non-Financial Companies

INTERPRETATION
Multiple proxy indicators and industry reports point towards the emergence of the green
shoots of a private capex upcycle in the post-pandemic years. The Index of Industrial
Production (IIP) data shows that the capital goods index and infrastructure/construction
goods index saw robust growth of 12.9 per cent and 8.4 per cent, respectively, in FY23. The
indices have carried forward their momentum thus far into FY24 and have grown by 7.5 per
cent and 11.1 per cent, respectively, on a cumulative basis till November 2023. The recent
results of listed/unlisted corporates also indicate expanding private investment in the first half
of FY24. As per Axis Bank Research, capital expenditure by Private Non-Financial
Companies has grown by 28 per cent in FY22, 23 per cent in FY23 and 10 per cent in H1 of
FY24(Chart6).

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Chart 7: Bank Credit to the Infrastructure Sector

INTERPRETATION
As the resolution progressed, the GNPA ratio started declining and has been downward since
March 2019. The trend continued even during the pandemic period, led by increasing
deleveraging and regulatory intervention. Parallelly, as recapitalisation continued, the Credit
to Risk-Weighted Asset Ratio (CRAR) improved, helping many weak PSBs to come out of
the prompt corrective action framework of the RBI. The banks became ready to extend credit
again, and so they did with the onset of the pandemic after the RBI and the government had
kickstarted the credit growth cycle. While the RBI eased repayment stress, the government
launched the Emergency Credit Linked Guarantee Scheme (ECLGS) to extend large volumes
of credit to MSMEs. Bank credit to MSMEs registered a Compound Annual Growth Rate
(CAGR) of 14.2 per cent from FY19 to FY24 (as of November 17, 2023). The government‟s
recent emphasis on capital expenditure has further strengthened the credit cycle, as seen in
the growing bank credit disbursal to the infrastructure sector. Between FY19 and FY24 (as of
November 17, 2023), bank credit to the infrastructure sector registered a CAGR of 4.2 per
cent (Chart 7).

47 | P a g e
Chart 8: Macro-vulnerability Index48 and Retail Inflation (per cent)

INTERPRETATION
Reigning in inflation with flexible targeting: The period between FY09 and FY14 was
marked by high average retail inflation47 of 10 per cent and high levels of
macrovulnerability. Since the advent of flexible inflation-targeting within the band of 4 +/- 2
per cent under the Monetary Policy Framework Agreement in FY16, retail inflation averaged
4.2 per cent till FY20. The Price Stabilization Fund (PSF) set up in 2014-15 has been
effective in tackling price volatility in important agri-horticultural commodities.
Concurrently, the fiscal balance of the general government and the country‟s external balance
improved, progressively reducing macro-vulnerabilities and generating buffers for turbulent
times ahead (Chart 8).

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Chart 9: Female Labour Force Participation Rate (rural+urban), usual
status, 15 years and above

INTERPRETATION
The abovementioned initiatives have already begun paying dividends, with the female labour
force participation rate (LFPR) rising to 37 per cent in 2022-23 from 23.3 per cent in 2017-
1862 (Chart 17), improvement in the sex ratio at birth from 918 in 2014-15 to 933 in 2022-
23, and reduction in maternal mortality rate from 130/lakh live births in 2014-16 to 97/lakh
live births in 2018-20. These underline the tectonic shift towards women-led development in
India.

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Table 1 Annual Labour Market Indicators (usual status, age 15 years and
above)

INTERPRETATION

According to the annual Periodic Labour Force Surveys (PLFS) by the National Statistical
Organisation, MoSPI, the unemployment rate has declined substantially from 6 per cent in
2017-18 (when the first round of the survey was conducted) to 3.2 per cent in 2022- 23, a
trend observed across male and female workers in rural and urban areas (Table 1). This has
been accompanied by a rising LFPR from 49.8 per cent in 2017-18 to 57.9 per cent in 2022-
23, driven by a surge in rural female LFPR, discussed in detail in the next section. The labour
markets also recovered swiftly from the impact of the pandemic, with the rural areas
witnessing a faster-paced resumption

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Chart 10: India’s External Debt Position and Vulnerability Indicators.

INTERPRETATION
India‟s external debt, placed at USD 635.3 billion by the end of September 2023, is
considered comfortable and has been prudently managed over time. External debt as a ratio to
GDP fell to 18.6 per cent at the end of September 2023 from 22.4 per cent at the end of
March 2013. The short-term debt was 20.1 per cent of Total External Debt (TED) at end-
September 2023 against 23.6 per cent at end-March 2023. A major part of short-term debt is
in the form of short-term trade credits. Chart 18 provides a snapshot of India's external debt
position during the past decade.

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Chart 13: Declining Gross Non-Performing Assets of SCBs (as % of Gross
Advances

INTERPRETATION
Bank credit, in recent years, has shown phenomenal growth, outpacing the growth in deposits
on the back of sustained demand momentum and robust economic recovery after the Covid-
19 pandemic. The growth in non-food bank credit at 15 per cent in FY23 was the highest in
the last ten years. This would not have been possible without a significant improvement in the
banking sector's health. Even as credit growth surged, asset quality across all SCB groups
kept improving, with GNPAs (gross non-performing assets) and Net NPAs relative to the
total advances dropping to a multi-year low in September 2023 (Chart 11).

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Chart 12: Reduction in Logistics Cost for Trucks after implementation of
GST accompanied by a rise in distance travelled per day

INTERPRETATION
A report by Bernstein, “India‟s Promise: The Prosaic Path to Sustained Growth”, highlights
that there has been a significant reduction in logistics cost (as a per cent of total value) for
trucks after the implementation of the GST, accompanied by a rise in the distance travelled
per day (Chart 12). Similarly, the average turnaround time (per day) at major ports has gone
down from 4.2 days during FY04-FY14 to 2.9 days during FY14-FY22. The government‟s
massive push for capex not only reduced logistics costs but also bolstered the construction
industry. This, coupled with the measures to increase domestic steel production and the focus
on affordable housing, has helped India achieve a growth of around 12 per cent per annum in
construction from FY22 to FY24.

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Chart 13: Monthly Fresh Rupee Loans WALR by Scheduled Commercial
Banks

Chart 14: Trends in real-estate prices (Average of quarterly YoY growth)

54 | P a g e
Chart 15: Bank Credit for Housing (as a per cent of GDP)

INTERPRETATION
Household investment has also contributed to the recent strengthening of the investment rate.
The household sector investment, which constitutes the largest share in the total Gross Fixed
Capital Formation, was, in fact, on a rising trajectory just before the pandemic. This was
driven by a gradual decline in growth in real-estate prices and a continued increase in bank
credit for housing (). After the pandemic, housing prices began to recover. The average
annual growth in real-estate prices has increased from 2.3 per cent in FY22 to 3.8 per cent in
FY23 and 4.3 per cent in H1 of FY24. That there has been an uptrend in housing sales and
launches 0), despite an appreciation in real-estate prices and higher interest rates (1), attests to
the strength of the recovery of incomes and optimism about the future.

55 | P a g e
Chart 16: Global Food Price Inflation (per cent)

INTERPRETATION
Inflationary pressures moderated in FY24 (April-December), with average retail inflation
easing to 5.5 per cent. The decline was driven by benign trends in core (non-food, non-fuel)
inflation, which gradually declined to a 49-month low of 3.8 per cent in December 2023. The
overall retail inflation is now stable and within the notified tolerance band of 2 to 6 per cent.
2.67 Persistence food inflation is a global challenge, including in several developed
economies. In India, the prices of specific food items were pressured by untimely rains,
leading to crop losses and weather-driven supply chain disruptions. Timely focus on supply-
side initiatives, based on meticulous price monitoring, is giving credibility to anti-inflationary
policies. Measures like strengthening buffers of key food items and making periodic open
market releases, trade policy measures aimed at improving domestic availability of food,
preventing hoarding through imposition and revision of stock limits, and channelling supplies
of select food items through designated retail outlets helped to keep inflationary pressures on
the check, amidst adversities. Consequently, India has managed to keep its food inflation at
moderate levels and lower than many large economies (Chart 16).

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 SUGGESTIONS

While there is a provision of maintenance of PMGSY roads by

contractors for a period of five years, it is felt that a separate
revolving fund may be created for attending to repairs and
maintenance of repairs after the expiry of initial five years.
Roads should be made keeping in view of providing a link to the
nearby town or market or important centre which can have
multifarious impacts on the lives of the people. Utmost care should
be taken that the villagers do not deteriorate the newly constructed
roads by digging holes etc.
It is therefore suggested that the funds for the construction of the
roads may be placed directly with the works department and this will
help early and timely release of funds to the contractors, which can
ensure timely completion of the roads without slippage of time and
cost overrun.
Local people are not engaged by the contractors to work on the
construction of PMGSY roads as daily labourers. It is suggested to
make mandatory for the contractors for engaging the local
people/villagers in the road construction activities on priority basis.
Further, there is no provision of maintenance of the roads constructed
under PMGSY and in order to ensure their maintenance, it may be
prudent to make budgetary provision and place funds either with the
Zilla Parishad or with the Panchayats for maintenance of PMGSY
roads.
It has been observed during the field visits that the PMGSY
roads are not having pucca shoulders and side drains. As a result,
during the rainy season it is feared that the formation will get eroded
and damage the road.
Road connectivity has given way to a new transportation system
inclusive of commercial and heavy vehicles. It has also introduced
speeding vehicles giving rise toa number of accidents on these roads.

57 | P a g e
 CONCLUSION

The Indian economy, with its ambitious growth targets and vast population, relies heavily on
government schemes to achieve social progress and inclusive development. However, the
effectiveness of these schemes can be a subject of debate. This research project is designed to
comprehensively analyze the impact of government schemes on various sectors of the Indian
economy. By employing a mixed-method approach that combines quantitative data analysis
with qualitative interviews from stakeholders, the study will move beyond a simplistic
assessment of success or failure. It will delve into the multifaceted ways these schemes
influence social welfare, infrastructure development, skill development, and agricultural
growth. The research will not only evaluate the extent to which these schemes achieve their
intended goals but also identify potential challenges faced in their implementation, such as
targeting errors, corruption, and bureaucratic hurdles. This knowledge will be instrumental in
informing policy decisions and resource allocation. By understanding the cost-effectiveness
of different programs, policymakers can prioritize investments in areas with the highest
potential for positive social and economic outcomes. Additionally, the research findings can
empower government agencies responsible for implementing these schemes to develop
targeted interventions that improve delivery mechanisms and ensure resources reach the
intended beneficiaries. Furthermore, the study will contribute to fostering transparency and
accountability by shedding light on how schemes translate into real-world outcomes. This can
lead to increased public trust in government initiatives and hold relevant authorities
accountable for efficient resource utilization. Importantly, the research will go beyond the
immediate target groups and sectors to investigate the potential spillover effects of
government schemes. For instance, a rural development scheme might not only benefit rural
communities but also stimulate demand for manufactured goods in urban areas, contributing
to overall economic growth. On the other hand, the research can also unveil unintended
consequences of certain schemes, such as subsidy dependence that hinders long-term
economic growth. Identifying these consequences allows for corrective measures to be taken,
maximizing the positive impact of government interventions. Finally, the research findings
will contribute to the existing body of knowledge on the impact of government interventions
in developing economies. By sharing findings through academic publications and
presentations, the research can stimulate further discourse on effective policy design and
implementation strategies, ultimately propelling India towards a more prosperous.

58 | P a g e
 REFERENCES
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2022.
3. ^ Jump up to:a b Seth, Dilasha (2 February 2021). "Budget: Central schemes outlay
sees rise despite talks of rationalisation". Business Standard India. Retrieved 10
April 2022.
4. ^ "Expenditure Profile 2022-2023. Union Budget 2022" (PDF). February 2022.
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govt set to axe about 40 schemes that 'have lost relevance'". ThePrint. Retrieved 8
April 2022.
6. ^ Jump up to:a b "Union Budget 2022-23: Number of centrally sponsored schemes cut
by half". Down to Earth. 1 February 2022. Retrieved 9 April 2022.
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2022-23 (Major Central Sector and Centrally Sponsored Schemes)" (PDF). Ministry
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Budget 2021: Big hike in finance and health sectors". The Indian Express.
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11. ^ Jain, Abhishek; Ramji, Aditya (2016). "Reforming Kerosene Subsidies in India:
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2017). "Kerosene Subsidies in India: The status quo, challenges and the emerging
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Today. PTI. 2 February 2021. Retrieved 23 April 2022.
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success". The Hindu BusinessLine. Retrieved 7 April 2022.
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schemes for better outcomes". Times of India Blog. Retrieved 9 April 2022.

60 | P a g e