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Alarming situation of Indian economy: Why we need to know about the crisis?
Indian economy is a mixed growing economy with a huge possible workforce population below the age of 35 years. Recently, it was in the news that India’s economy has been the world’s fastest growing economy, surpassing China. Prime Minister Narendra Modi, in his Independence Day speech, showed his desire to take it to a five trillion economy within five years. But, the present scenario is a little different from what our PM has intended to do.
The world’s fastest growing economy is in the surroundings of black clouds from the past few months. Many data released by the government and non-government organizations revealed the crisis situation in Indian economy.
While at first all the claims were rejected by the Finance ministry, but seeing the alarming condition, the finance minster hosted a press conference a few days back and announced some policies to ‘tackle the crisis’.
In the last few days, the Reserve Bank of India came to rescue the government and agreed to transfer Rs 1.76 Lakh Crore to centre, unprecedentedly, that sparked a huge debate about its feasibility which is altogether a different matter of discussion. Although, the finance minister was convinced that everything was fine and there was nothing to worry about in longer terms.
As a young student of economics and an enthusiast of Indian economy, the data which came out was little worrisome for me, like many others. According to a report of Economic Times, GDP grew at 5 per cent in the first quarter of FY-20 as per data revealed by the government, marking the slowest growth since the fourth quarter of FY-13.
A recent report by the World Bank showed that the Indian economy slipped its position from 5th to 7th in global perspectives. Unemployment rate is at 6.1% in FY-18 which is very high compared to last few decades. Growth rate in the major sectors of Indian economy like agriculture, foresting, fishing and manufacturing has declined significantly which is a clear sign of economic slowdown or stagnation.
Slowdown in private consumption is also in the worry and as a result of which leading biscuit manufacturer, Britannia Industries Ltd, recently sounded alarm bells over the sharp deceleration in its domestic sales volumes. A report published in the Business Today reported that India lost 11 million jobs in 2018 where the rural areas were worst affected.
The automobile sector is heavily affected by this slowdown and the number of unsold vehicle is increasing day-by-day. The Stock Market is showing a 17 year low record in the previous month. Investors are not willing to invest in this economy and exports have reduced to 10 per cent. Value of Rupee compared to Dollar is falling sharply and significantly.
Although, it is worth mentioning here that the trade war between US and China and multiple outside reasons are adding fuel to this crisis. But at the same time, economies of some developing countries are either stable or increasing amid the turmoil. The solutions to fix this are not that simple and instantaneous. But first of all, we need to admit it that there exist some problems that need to be addressed unlike the way the government refused to do so in first case.
We need to develop policies to attract investors to invest in our economy; education and healthcare are the two sectors where policies should be diverted to. Job creation should be started from grassroot level and existing schemes should be checked whether they are benefitting people or not in real scenario. Small and medium Enterprises should be allowed to blossom and small industries should be encouraged to set up by lowering norms and other paper works.
Above all, we need to understand the gravity of this critical situation. Economic condition of a country has immense influence everywhere. Economic crisis has direct bearings and consequences in our lives and pockets. So, it is our right to know about the present situation of the country and government is liable to inform us about it as the same way we are informed about different schemes and other policy implementations.
Views expressed by the author are his own.