Answer:

Introduction:

India, as an emerging global economic powerhouse, is at a juncture where its growth story is influenced by a confluence of both global and domestic factors. While the country has showcased significant economic resilience and adaptability, it’s imperative to address challenges to ensure that growth is both sustainable and inclusive.

Body:

Global Factors Impacting India’s Growth:

• Trade Dynamics:
  • Trade tensions like the US-China trade war can disrupt global supply chains and affect India’s exports and imports.
  • According to the World Trade Organization (WTO), the US-China trade war could lead to a 0.7% decline in global GDP growth.
• Global Economic Slowdown:
  • The financial crisis of 2008 and the COVID-19-induced recession of 2020 impacted India’s export demand and FDI inflows.
  • In 2020, India’s GDP contracted by 23.9% in the April-June quarter due to the pandemic’s global effects.
• Oil and Commodity Prices:
  • As a major oil importer, fluctuations in crude oil prices greatly influence India’s current account deficit.
  • In 2018, when crude oil prices reached $80 per barrel, India’s oil import bill surged by 20%.
• Foreign Investment Flows:
  • Changes in interest rates in the US can influence the flow of FDI and FII in India.
  • The Foreign Direct Investment (FDI) equity inflows into India for the fiscal year 2019-20 stood at $49.97 billion.

Domestic Factors Impacting Growth:

• Policy Environment:
  • The introduction of GST in 2017 aimed to streamline taxes but faced initial implementation challenges.
  • Post-GST, there was an initial dip in GDP growth to 5.6%, though it was seen as a short-term effect.
• Infrastructure Bottlenecks:
  • Inadequate logistics and transportation networks can drive up the costs for industries.
• Banking and Financial Health:
  • The rise in Non-Performing Assets (NPAs) has hindered banks’ lending capabilities.
  • As of 2019, the gross NPAs of Indian banks were around 9.1% of total loans.
• Demographic Factors:
  • India’s young population offers a demographic dividend but also demands job creation.
  • India needs to create 8-10 million jobs annually to cater to the young population entering the workforce.

Measures for Sustainable and Inclusive Development:

• Infrastructure Development: Investments in physical infrastructure like roads, ports, and logistics hubs can enhance connectivity and reduce costs.
• Reform Financial Sector: Addressing the NPA crisis, strengthening financial institutions, and encouraging financial inclusion can stabilize the economy.
• Promote Green Energy: Investing in renewable energy sources can ensure sustainable growth.
• Skill Development: Tailoring educational and vocational training programs to meet industry demands can harness the demographic dividend effectively.
• Promote MSMEs: Small and medium enterprises can be engines of job creation and socio-economic development in both urban and rural areas.
• Inclusive Technology Integration: Digital initiatives can bridge the urban-rural divide, ensuring the benefits of technology reach all strata of society.

Conclusion: 

India’s growth trajectory, shaped by both global and domestic influences, demands a multifaceted approach. Adopting sustainable and inclusive development measures can ensure that the nation not only achieves economic milestones but also ensures the well-being of every citizen in its growth story.