This article was created by interviewing a finance student (CA Inter) gaining his views on micro economics and current trends going on.
a) Can you briefly explain your involvement and experience with microeconomic activities in India?Well, I often buy things and eat from the local shops and vendors despite having big chain stores near my place of residence. I love contributing to local businesses and building a sense of community.
b) How do you think microeconomic initiatives have contributed to improving livelihoods in rural and urban areas?
Well, they have contributed to rural and urban industrialisation by prospering khadi, village and coir industries.
c) What is the role of small and medium-sized enterprises (SMEs) in shaping India's microeconomic framework?
Well they do create a lot of jobs, I mean they are the second largest employer in our country and they also contribute significantly to India’s GDP. They contribute around 8% of the country's total GDP and they also contribute about 40% of India’s exports and about 45% of India’s manufacturing. So yeah, they are pretty important.
d) Which government policies or schemes do you think have significantly impacted the microeconomic development of India?
I think “Make in India” has helped India become a global manufacturing hub by improving our industrial capabilities and creating world class infrastructure. The “PLI” scheme has attracted investments and boosted India’s exports. In the past few years, the government of India has also launched several schemes to boost businesses like “Agriculture Infrastructure Fund Scheme” and “Pradhan Mantri Mudra Yojana” which has boosted our economic growth significantly.
e) What are the key challenges faced by microeconomic initiatives in India?
Well I think unemployment is a big challenge because our country has a huge population and it’s difficult to provide employment to everyone. I think income inequality is also a huge problem because the gap between the rich and poor is very large and we also need to work on our infrastructure because it hinders our economic development and it contributes to inefficiency. Also we have a huge population growth problem, our birth rate is high compared to our death rate and the government has to take care of the basic needs of everyone.
f) How has technology influenced microeconomic activities and empowered grassroots business?
Well one very obvious example is the introduction of the UPI. We can have monetary transactions even with the vegetable vendors without the need of carrying cash around and this ease of doing transaction influences people to spend more on goods and services in our economy. This has also encouraged people to open more bank accounts which makes it easier to keep track of our wealth and enjoy various government benefits like subsidies.
g) What is your perspective on the role of microfinance institutions in boosting microeconomic movements in India?
Well I think that they are very important because they enable consumers to obtain loans when they need it. Most banks rarely give small loans. These microfinance institutions give micro loans which fulfill this gap. They provide their services to small and medium size businesses leading to economic development and social development.
g) How critical is community participation in the success of microeconomic initiatives, and what strategies enhance it?
Well it’s very critical because I think community members can contribute their ideas and influence the decision making process to address the local problems and it can also help create jobs and improve the living standards. It also gives people a platform to voice their opinions and to take an active role in shaping their futures. It can also help to promote sustainable community development and here are some strategies that enhance community participation. First we can be more inclusive by offering a variety of ways for community members to participate, we can build trust, we can make it more relatable to people from all backgrounds. We can also incentivise participation by recognising and rewarding their participation and we can use digital platforms so more people can connect to our community and we can use focus groups which can be a quick way to generate community feedback.
h) What are your predictions or expectations for the growth and sustainability of microeconomic movements in India over the next decade?
I think the Indian economy is expected to grow and remain sustainable over the next decade with some predicting that growth rates up to 8% annually. I predict that India’s share of global economy will increase around 10% by 2030 and it will become the 3rd largest economy soon surpassing Germany and Japan. I expect more job creation and growth in various sectors, especially manufacturing if we plan to surpass China eventually.
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