Efficient policy of India

Public policy and governance, which defines country’s growth strategy, plays a significant role in any country’s development story. In case of India, if its development and growth is compared with other nations, who were once just as developed as India was, we found that India has not been able to transform itself into a developed nation that it could have done by now. The reason behind this is not just slow but inconsistent growth of India’s GDP  and its public finance policy, which together played an important role in its inefficient growth.  India’s tax to GDP ratio and Expenditure to GDP ratio is just 1/3rd of most of developed nations like European Union countries which together have tax to GDP ratio as high as 40.1 % in the year 2011.India has never shown a consistent growth rate in its 65 years unlike its other peers  for example Indonesia, Brazil, China. On the other hand, Indian government has been following divestiture led privatization policy, which raised the Non debt Capital Receipts for the country in place of contributing to the Non-Tax Revenue. These points of inconsistent growth, public finance policy leading to low tax to GDP ratio, divestiture led privatization prove that macroeconomic policy of India is not very efficient and it has not able to utilize its capital efficiently.   Key words: GDP ratio, divestiture led privatization, efficiency, growth rate.