Five quarters ago, the economy was growing at eight percent. Now it has reached five percent by fall. It is not that this decline has come suddenly.
I would like to mention one more thing that it is less than five percent because the quarterly growth rate figures are based on organized and corporate sector.
If the unorganized sector is not fully included in it, then it is assumed that the unorganized sector is also growing at the same speed as the organized sector.
But there are reports from all around that the unorganized sectors associated with industries like bicycles in Ludhiana and shoes in Agra have closed in a large number.
If the growth rate of unorganized sector is falling, then it is wrong to assume that the unorganized sector is growing at the speed of organized sector.
Our unorganized sector employs 94 percent of the people and produces 45 percent. If where 94 percent of the people work, production and employment are decreasing there then the demand decreases.
The demand that has come down has started since demonetisation. Then after eight months, GST was affected and after that NPAs of banks were affected. After all, the crisis of the non-banking financial companies had an impact.
That is, the economy has suffered three big shocks in three years, due to which unemployment has increased. Statistics from Chennai Mathematical Institute show that the number of employees in the country was 45 crore, which has come down to 41 crore.
This means that the jobs or work of 40 million people have been lost. When the income of such a large section is reduced, then obviously the demand will decrease. When the demand decreases, the consumption capacity will decrease and when the capacity of consumption decreases, the investment will be reduced.
Why demand fell
The rate of investment in our economy was the highest in 2012-13. At that time the rate of investment was increasing at the rate of 37 percent and today it has come down to less than 30 percent.
Until investment does not increase, growth rate does not increase.
I believe that the problem started from the unorganized sector and now it is slowly impacting the organized sector as well. For example, you can look at the automobile and FMCG sectors.
You must have heard about the decrease in demand for Parle-G Biscuits. It is an organized sector. They are used by people associated with the unorganized sector. When the income in the unorganized sector is less, then the demand will decrease automatically. FMCG has the same condition.
Reality of government data
If our economy is growing at a rate of six or five percent then it is a very good pace. Even after this, why consumption is decreasing, it should have increased. Investment should also have increased at a speed of five percent.
When consumption has come down, investment is not increasing, it shows that the economic growth rate is not five, six or seven percent, but it is growing at zero percent, because the statistics of the unorganized sector are not included in it. Are.
The day you add the statistics of the unorganized sector to it, it will be known that the growth rate is zero or one percent. Statistics of the unorganized sector are collected once in five years. During this time it is assumed that the unorganized sector is also growing at the same speed as the organized sector.
This guessing was fine till demonetisation, but as soon as demonetisation was done, it had a tremendous impact. On unorganized areas and its decline started.
This method of including the estimate of the growth rate of the unorganized sector in the GDP data after 9 November 2016 is incorrect.
It is also being said that the Indian economy is going through a recession. According to government data, the economy is going through a phase of slowdown, not a recession. When the growth rate becomes negative, then that situation is considered a recession.
But if the figures presented by the government are included in the statistics of the unorganized sector, then the Indian economy is going through a recession.
GST and banks merge
The unorganized sector was beaten after demonetisation. After that GST was implemented. However GST does not apply to unorganized sectors.
GST has been impacted on organized sectors. Since the last two and a half years since GST has been implemented, more than 1400 changes have been made. This has led to a lot of confusion among the people of organized sector.
People are not able to file GST. About 1.2 crore people have registered for GST, but only 70 lakh people file GST and only 20 percent of the annual returns are filed.
So overall the GST has received a tremendous shock to the economy.
The problem starts with the unorganized sector and the organized sector is also not untouched. The government’s tax collection has come down due to slowdown or slowdown in the economy. Last year, the GST decreased by 80 thousand crores and the direct tax also decreased.
In total, the government treasury lost Rs 1.6 lakh crore. When the income of the government decreased, it reduced the expenses. When the expenses are less, the recession will deepen.
It is now being said that the merger of banks will strengthen the economy. But this is wrong. The impact of merger of banks will be seen after five to ten years. It will not have any immediate effect.
The statements made by the government make it clear that it has accepted that the economy has weakened and a package is being announced one after the other. RBI is also announcing.
They are not talking about recession right now, but gradually all will start talking about recession, when the data of unorganized sector will be included.
The RBI has released a package of Rs 1.76 lakh crore. It will also be used for the organized sector. No package has been announced for the unorganized sector. The package has not been announced to increase employment.