THE DESCENDING ‘GDP’ TRAJECTORY OF THE SEVENTH-LARGEST COUNTRY IN THE WORLD-INDIA
Turning a blind eye to the serious crisis of the deteriorating economy of India would not change the fact that the GDP rate of the country has drastically fallen.
With the lowest recorded value of 5% in the last 6 years, this would be one of the most impactful setbacks for the country and on the course for respite the Finance Minister Nirmala Sitaraman has suggested measures that promise to pool the country out of this situation of an economic slowdown.
After the finance minister announced the big bank mergers, the forthcoming plans are to yield results from boosting the demand for cars and houses, amplifying the value for the business in the economy, making credit and working capital more easily available in the country.
Although, the market experts believe that this dramatic and sudden fall can only be treated if timely reforms are undertaken. With India losing its position of the world’s fastest-growing economy to China earlier this year, this GDP fall has worsened its situation on international trade and development.
The consumption and confidence at the end of the consumer have been largely affected due to the lack of clarity regarding these concerns and the failure of the corporate sector in recognizing the transition has only bought a rough patch in the demand scenario. The poor decisions taken in the construction, banking, real estate, housing finance industries in recent times have resulted in the collapse of waiting for a bailout from the situation.
If the government is looking forward to the consumption cycle to start running in the right direction, the money will have to be going to the accounts of the common man. And for starters the tax slabs can be altered; the council for GST can sit this through and reduce the burden on the corporate sector. For an economy that functions well, it is imperative to follow measures that have been achieved by reforms orchestrated through a system of compliance.
Experts have suggested several way outs that can be immediately implemented like providing the auto sector with capital to invest in electric vehicles and up-skill the employees as well. The collection of GST can be modified for the companies that hold a turnover below a crore for the quarterly collections. Work can be started on the Direct Tax Code and the GST can be reduced. Reducing the real interest rate to ensure that the capital cost comes down. The credit flow has to be improved for both the industry and the consumer and the need for changing the culture of credits in the public sector banks is paramount and many other measures have been suggested to bring the economy to an even standpoint
According to the reports released by the National Statistical Office, the slipping GDP has been weighed further down due to the hunch in the declaration of investments, demands by consumers and the output of manufacturing. And on the other hand for China which happens to be a comparatively larger economy has recorded a growth of 6.2%. Both the economies of India and China together have contributed a mammoth to the Asian region’s GDP. With India slowing down on the GDP chart, its hope of becoming an economy of $5 trillion in the forthcoming years seems wobbly.
Opposition leaders have criticized the National Democratic Alliance government and blamed them for introducing policies implemented in haste leading to low inflation rates, loss of jobs, loans from the Reserve Bank of India and more.
The former Prime Minister, Manmohan Singh also raised his concerns recently over the country’s situation sharing that he feels that the country has wedged between a prolonged slowdown due to the economic policies of the present government hoping that changes are made sooner for the country to come back on the right track.
The former PM also suggested that the government should set disputes aside for now and focus on fixing the economy. He also added that the country holds great potential for growth and realizing the same the present government needs to start by talking to the sane voices that can help in bridging the gaps and steer the economy out of this man-made crisis.