Indian economy needs serious restructuring. We have lot of elements leading to high cost structure in the economy. Our roads are in bad condition, The improved highways too does not contribute in lowering the cost due to high toll structures and wastage of time and fuel at toll plazas. We have one of the highest indirect structure in the world. Even much touted GST has highest tax rate at 27%. Moreover, the entry barriers discourage the new entrepreneurs and obstruct the competition.
High interest cost for infrastructure and capital intensive projects are also lead to high cost structure. High dependence on debt by corporate entities is also detrimental to economy as any downturn in business fortune make them sick. This leads to stress on our banking system too.
Higher equity component in business leads as a cushion in business.
Our planners, business houses, administrators need to thrash out the problems. Privatisation should not lead to burden on banks. Let promoters bring their own equity, if want to enter the infrastructure sector.
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