<\/p>\n<\/p>\n
Many independent economists had months back, predicted that India’s economy will worsen but instead, the government chose to describe them as “doomsayers”. On August 31,2020 the government’s own National Statistical Office proved the “doomsayers” right when it disclosed that the economy has contracted by 23.9% in the first quarter of the 2020-2021 fiscal year, which ended in June, compared with the same quarter the previous year. A contraction of 23.9 per cent simply means that the total value of all goods and services fell by that proportion as compared the same three-month period last year. That’s the worst performance since the government began publishing quarterly gross domestic product figures in 1996. India has never recorded a drop in real GDP growth since 1979. There have been four ‘negative growth’ periods in India since Independence: late 1950s, 1965 (-2.6 percent), 1972 (-0.5 percent) and 1979 (-5.23 percent). COVID-19 could well push India into full-blown recession for the first time in 40 years into an L-shaped scenario. It is also the worst decline among the world’s major economies releasing GDP figures for that same quarter, according to data from the Organization for Economic Cooperation and Development. Even before coronavirus pandemic, India’s economy was slowing down with GDP growth at 4.2% despite the government’s hoopla that the economy will bounce back with a bang to propel India towards achieving a $ 5 trillion economy or Rs. 37,51,93,25,00,00,000 economy. In 2016, the government took 85% of paper money out of circulation as part of a demonetization policy that aimed to tamp corruption but also hurt small, cash-run businesses. The following year, a new goods and services tax scheme aimed to simplify the tax code but also hurt big manufacturers. Last year, unemployment hit a four-decade high. In late March, with cases of COVID-19 still low in India, the government announced the biggest lockdown in the world. Lakhs of impoverished laborers were stranded in urban centers and industrial zones with little to eat. The government scrambled to open shelters and food distribution centers for them, but not before dozens starved to death on roadsides. In May, the government began to ease lockdown restrictions and Prime Minister Narendra Modi announced a Rs.20 trillion COVID-19 stimulus package, with aid earmarked for the poor. Despite this, manufacturing and consumer spending haven’t recovered enough. Unable to check the economic downslide, the union finance minister Nirmala Sitharaman implied that it was due to the pandemic and an “act of God”. Reacting to this, former union finance minister and Congress leader P.C.Chidambaram asked “If the pandemic is an Act of God’, how do we describe the mismanagement of the economy during 2017-18, 2018-19 and 2019-20. Before the pandemic struck India?” He maintained that even before the pandemic, India had eight quarters of declining growth which had nothing to do with the pandemic but with the policies of the Modi government. He said the corona only added to the problem. Further, economists warned that in the absence of increased government expenditure, which doesn’t appear to be on the horizon, further contractions could be on the cards in the upcoming quarters. If India records a contraction in the current quarter, it would have officially entered into a recession (defined as two consecutive quarters of contraction). The scenario should make the government realise that it is not corona but its policies and so it’s inevitable to go back to the drawing board.<\/p>\n","protected":false},"excerpt":{"rendered":"
Policy virus and economy<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[685],"tags":[],"class_list":["post-209217","post","type-post","status-publish","format-standard","category-editorial"],"_links":{"self":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts\/209217","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/comments?post=209217"}],"version-history":[{"count":0,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts\/209217\/revisions"}],"wp:attachment":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/media?parent=209217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/categories?post=209217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/tags?post=209217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}