On the economy front, Narendra Modi’s government has received a big setback. By the first quarter of the current financial year i.e. April-June, India’s economic growth rate has come down to just 5 percent.
During the same quarter of the last financial year, the growth rate was 8 percent. Economists say that the current growth rate is the lowest in the last 25 quarters.
In the previous quarter (January-March), the growth rate was 5.8 percent.
Earlier, the lowest growth rate was recorded in the last quarter (January-March) of the financial year 2012-13, which was just 4.3 percent.
According to the data released on Friday, the manufacturing sector recorded a huge decline in the previous quarter. This sector has had the most impact on the growth rate.
The growth rate of manufacturing sector has come down to 0.6 percent. The decline in agriculture is also going on.
‘ The result of weak government policies ‘
Economic affairs experts say that this performance is the result of the weak policies of the Narendra Modi government.
Experts believe that behind the poor performance on the economic front, decisions like demonetisation and implementation of GST are the real reasons.
Economist Bharat Jhunjhunwala believes that demonetisation and GST have put an end to small enterprises or put them under pressure.
“The effects of demonetisation and GST policies were immediately visible, but as the disease progressed slowly, it started weakening the economy,” he says.
Senior Economic Journalist MK Venu believes, “The data clearly shows that the economy is entering a bad phase. The auto sector, consumer goods sales have fallen, these figures are the result of that.”
Did the recession come ?
In early August this year, the Reserve Bank lowered its GDP growth forecast to 6.9 per cent for the current financial year 2019-20, in view of the signs of slowing of the economy.
Whereas earlier, the Reserve Bank had predicted a 7 percent increase in the economic growth rate in this financial year.
In such a situation, the question arises whether the country’s economy is going through a recession?
Bharat Jhunjhunwala denies this and explains its technical meaning, saying, “The recession comes when the country’s GDP remains continuously negative for two quarters.”
It is five percent. Technically speaking, it is not a recession and it is unlikely to be seen, because the growth rate of our service sector is still positive.”
After releasing the data, Chief Economic Advisor Krishnamurthy Subramanian defended the government and said, “The words we are using suggest that we are going through a recession, so we need. ”
What will be the effect on the pocket of common people ?
What will be the impact on the lives of common people if India’s growth rate reaches the lowest level in the last six years?
In response to this question, Bharat Jhunjhunwala says that it will have some positive and some negative effects.
This will be beneficial, but the negative effect will be that the employment opportunities that are left will also be closed. I cannot say that will be completely closed, but comparatively Will decrease and unemployment will increase. ”
Bharat Jhunjhunwala also says that the government’s fiscal deficit will also be under pressure due to the decrease in economic growth rate.
Questions on government policies
After the formation of the new government in the month of May this year, Finance Minister Nirmala Sitharaman presented the Economic Survey in Parliament.
The Economic Survey had predicted 7 percent of the GDP growth rate in the current financial year i.e. 2019-20.
At the same time, India has been targeted to create a 5 trillion US dollar economy by 2025. For this, it was said to keep the growth rate constant at 8 percent.
Not only this, by the year 2032, the government has stressed the need for a strong and flexible infrastructure to create a 10 trillion US dollar economy.
But the figures released by the government are not meeting the expectations and estimates earlier.
Senior economic journalist MK Venu considers the weak will of the government as the reason for this. They say that the government does not look serious for the betterment of the economy. He is more focused on other issues.
Says MK Venu, “People felt that the new government would focus on the betterment of the economy, but it did not happen. The government is using its large base on political issues rather than on the economy. They are Hindu nationalism, Ram temple, Kashmir is addressing issues like triple talaq. ”
Bharat Jhunjhunwala, a financial expert, says, “To bring the economy back on track, the government will have to change its economic policies. Import has to be reduced. Small industries have to be increased, which will create employment.
He also believes that it is necessary to change the existing structure of GST.