Economic Growth can be defined as a positive change in the level of goods and services produced by a country over a certain period of time.Economic growth is an increase in real GDP; it means an increase in the value of goods and services produced in an economy.
Following are some of the factors which can promote economic growth:-
1] Recovery in Domestic Consumption & Exports –
Improvement in consumption activity as well as a recovery in exports could lead to a progress in economic activity. Exports play an important role in the economy, influencing the level of economic growth, employment and the balance of payments.Domestic household consumption is still a more important part of GDP.
Earnings and volumes grew for the third straight quarter for most fast-moving consumer goods firms in the three months through March, according to their exchange filings. Consumer-focused companies had struggled after demonetisation, and GST—in less than a year. The recovery that began in the three months to September has only strengthened, with GDP growing at its fastest pace since the note ban in the March quarter.
2] Recovery in Rural Demand –
A renewal in rural demand is good for broader growth recovery. Raising the prices on crops and spending more on irrigation and infrastructure in rural areas will increase rural image increasing its demand. Farm loan waivers by some state governments are also helping which in the end leads to recovery in rural demand.
Rural growth at 13.5 percent outpaced urban demand which rose at 10 percent, according to a May 29 report by Nielsen India. The FMCG sector grew 11.3 percent during the quarter and 13.5 percent in the year through March, it said.
3] Revival in Private Capex –
As private capex recovers, it will revive job creation, which will ensure that the economy will be heading towards the productive growth phase.
The combination of balance-sheet fundamentalsandimproving business return expectations, along with animproving financial system, should be able to meet investment credit demand and lead to a private capex recovery. Araise in private capex would provide support to a sustained growth cycle in the coming years.
In December 2017, India’s factory activity expanded at the fastest pace in five years on the back of rising output and new orders. Meanwhile, industrial output for the month rose 7.1 percent on-year, beating a market forecast of 6.2 percent.
4] Affordable Housing, Rural Roads & Electrification –
Infrastructure is the backbone of any economy for growth and development. For development and growth of any economy, infrastructure needs to be strengthened in a proper and adequate manner.
Various measures to promote growth of the economy which, include push to infrastructure development through affordable housing, higher allocation to rural road construction, focus on electrification all over and in every corner.Affordable housing will generate demand for construction, steel, cement and boost economic growth. There should be a strong energy in the expansion of roadways, and the power generation capacity should also increase at a healthy speed.
Recently, government has given green light to a Rs 7 trillion infrastructure program in late 2017, with the aim to pave more than 80,000 km of road by March 2022.
Above mentioned are just some of the factors among many that will boost economic growth going forward.