Page 30 - 15NOV2019E

Economy

table 1-Quarter-wise growth rate of India
of them are struggling to find suitable
Quarter FY 2018-19 FY 2019-20 employment. Though many, who are un-
(GDP Growth rate) (GDP Growth rate) der-employed and disguisedly employed
in agriculture are mostly excluded in the
Q1 8 5 methodology adopted to study unem-
Q2 8.2 - ployment. If that is included, the statistics
Q3 6.9 - could be scary
In the present situation a combination
Q4 5.8 -
of demand side and cost side factors is in-
Source-CSO and RBI Report terplaying to aggravate the slowdown in
Indian economy.
growth for 90 per cent of the world this India is losing its demographic divi- As we see that corporate sector is fac-
year, and the effect is even “more pro- dend due to sluggish demand, liquidity ing glut in production, it has an impact
nounced” in some of the largest emerg- crunch, subdued investments and finally, on ancillaries- mostly run as SMEs which
ing market economies like India.” the tight job market. The high unem - are huge employment generators. This
The target of propelling Indian econo- ployment rate which some reports have has an impact on demand for credit and
my on the fast-track growth and upgrade quoted to be the highest in last 45 years is service of debt. Despite best efforts of
the economy at US $5 trillion by 2024 not a good signal for a growing economy cost cutting, through lay-offs and other
from the current US$2.8 billion seems like India. According to Centre for Moni- measures many units have become NPAs
unachievable with the current growth toring Indian Economy, The year-on-year (Non-Performing Assets) putting our
projections. The observation by the IMF employment growth in rural India was financial sector under stress.
chief, based on the report ‘World Eco- clocked at 2.9 per cent in August 2019 and Sensing the gravity of situation,
nomic Outlook’that has been recently at the same time urban India registered Finance Minister Nirmala Sitharaman
released; stirred up a hornet’s nest of a 0.2 per cent decline. The rural unem- announced a roll-back of corporate tax
economic thinkers and experts. ployment rate was calculated to be 7.8 from 30 per cent to 22 per cent. After an
Of late, Moody’s Investor Services has per cent and urban at 9.6 per cent during initial roar and applaud, the firms and
also cut down the GDP forecast for India August 2019. industrial outfits evaluated that it is only
The labour market is still recovering
to 5.8 per cent from earlier 6.2 per cent. from the shock of demonetization and a supply side solution. The government
Economic meltdown: Are low inflation is one of the major causes GST (Goods and Services Tax) that led to a lem with a clear approach. The demand
Government’s obsession with the
has not been able to diagnose the prob-
rise in unemployment rate in India, says
of tepid economic growth, is believed by
side incentives like reduction in indirect
tax would help to fuel up the demand.
some of the economists.
CMIE’s report.
we waiting for it to turn growth rate should be close to 10-12 per working age but an increasing number an upfront capital infusion of 70,000
The Finance Minister also announced
Nearly two-thirds of Indians are of
For a 5 trillion economy, the nominal
cent till 2024. A 6 per cent growth rate
cannot drive up the economy from the
into a catastrophe? current size of $2.8 trillion to $5 trillion
by 2024. While the GDP growth rate in
the first two quarters has remained low,
the policymakers are banking on bet-
ter growth performance in the next two
The confirmation of the widespread economic deceleration in the wake of downward quarters. The demand is expected to rise
revision of GDP forecast to 6.1% from the earlier 6.9% raises red flag for an impending during the festival season and the finan-
cial stimulus pumped in the economy is
economic predicament, reports komal amit gera projected to bear fruits with a time lag,
and accordingly boost demand in the
ndian economy is in a vicious circle tanks about a deep demand deficit in the of October by the Reserve Bank of India first few months of 2020 calendar year.
of slowdown. The symptoms of de- economy got fortified when the Reserve raised the red flag for an impending eco-
teriorating health of the economy Bank of India officially announced a nomic predicament. Forlorn labour market and
started appearing during FY 2018- downward revision of GDP for FY 2020. The dismay was further reinforced demand deficit
I 19 when statistics on low employ- The confirmation of the widespread when the International Monetary Fund The failure of government in creating
ment rate, lay-offs in leading corporate economic deceleration in the wake of Chief, Kristalina Georgieva was profusely jobs has severely affected the demand
houses and rising non-performing assets downward revision of GDP (Gross Do- quoted by the media saying, “The global side and the widening gap between de-
of banks came to the fore. But the claims mestic product) forecast to 6.1 per cent economy is witnessing “synchronized mand and supply is the major cause of
and concerns of industry and think- from the earlier 6.9 per cent in first week slowdown”, which will result in slower decelerated economic growth.

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