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Lack of Economic Policies by the present government is the reason why India’s facing Economic Downshift

  • India’s slipped to 7 spots in GDP rankings terms of GDP Though it is among the fastest-growing economies in the world high growth of GDP itself is not a goal but a measure to reach the goal of development. The difference between growth and development is that growth is a quantitative term while development is a qualitative term. Development ensures the improvement in the quality of life of the people but growth is just the increase in income and latter is necessary but not the sufficient condition to usher development. If the economic growth is polluting the air we breathe, creating unemployment and failed to increase life expectancy, then it is an unjust and ruthless growth without a humane aspect.
  • India is now among the largest economies of the world in terms of GDP after the several decades of economic growth yet it is to be classified as a developed country.
  • India’s world-beating economic growth is a big risk as rupee is at a record low in comparison to the dollar. The rising local interest rates are hurting consumption and throttle the recovery. Exports are also at risk from the global trade war between America and China.
  • The twin shocks of demonetization and Goods & Services Tax have dented the growth rate in India. The growing oil price following American sanctions on Iran crude oil. Every $10 increase pushes up the inflation rate by 30 to 40 basis points and hurts economic growth of the world’s fastest-growing oil user.
  • Add a weaker currency to this equation, and the problem gets compounded. Every rupee change in the exchange rate against the US dollar impacts New Delhi’s crude oil import bill by about 109 billion rupees ($1.5 billion) on an annualized basis, according to the oil ministry’s Petroleum Planning and Analysis Cell.
  • Low level of national income and per capita income, vast inequalities in income and wealth, tremendous population pressure and massive unemployment have created tremendous pressure on the Indian economy.
  • In India per capita income is low and it is marked by great inequalities in the distribution of income and wealth. Nearly 60 % of the total population share one-third of India’s national income while 5 % rich of the total population enjoy the same amount of national income. This inequality widens the problem of poverty.
  • High birth rate (23.5 per 1000) coupled with a low death rate (7.5. per 1000) is the genuine cause for the population explosion in India. In the 20th century, India’s population went up by 5 p.c. as against 3 p.c. increase in the world’s population as a whole. Due to population growth employment has increased in recent decades. What India experiences now is the ‘jobless growth’.
  • All these factors may push the rupee, Asia’s worst performer this year, even lower, it will dampen some of the optimism that has propelled the local stock market to record highs. They also serve as a reminder to investors that Asia’s third-largest economy, which has overcome the twin shocks of a cash ban and the chaotic introduction of a nationwide consumption tax, is not fully out of the woods yet.

1)Auto Mobile sector is facing a hard time for many days. Companies major carmakers companies like TATA and Mahindra, Maruti Suzuki is there are not able to sell their cars in markets that is why companies are cutting temporary jobs like India’s NO 1 Car Maker Company Maruti Suzuki cuts due to the massive sales decline in his passenger vehicles. There were also reports that Maruti is also faced a decline in its Q1 profit that reported 27.3 per cent year-on-year decline in its net profit at Rs 1,435.50 crore for the first quarter ended June 30, 2019, dented by lower sales volume and higher depreciation expenses.

  • There where also the news Mahindra and Tata said on Friday they would cut production at some plants in response to slowing demand that industry executives say has driven the sector into one of its worst downturns. Earlier Tata has also shut down some blocks at its Pune plant in Maharashtra main reason for the shut down the plant “challenging external environment Fell of Auto Sector can be seen in the share of Tata Motors and M&M which almost fell between 1.8% and 2.4 %. Due to this shutdown, companies are forced to cut the jobs.
  1. 2) Real Estate this sector is also one of a major part of the county’s economy but from last 6 years, this sector is also facing high recession. This sector is also known as the golden egg sector of India. People in India buy properties for their future and opted this sector as a safeguard. But from 6 Real Estate is not having a good time Builders are have taken millions of rupees debt from the banks of India but they are not able to deliver the houses to the home buyers Like Amrapali is a recent example where The Supreme Court criticised the lenders for failing to monitor the end-use of loans to the company, one of several developers in India to hit financial trouble in recent years after a decade-long building boom.

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1 comment

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