The Top 10 Economy Headlines of 2019 | The Wire Business Report

The boardroom drama between Cyrus Mistry and the Tatas is the latest among a series of stories.

In this episode of The Wire Business Report, Mitali Mukherjee takes you through 10 economy stories that created a buzz this year.

Sub 5% growth, fears of stagflation, dismal graduate unemployment figures and the lack of government intervention are just a few of them.

She also explains the boardroom drama between Cyrus Mistry and the Tatas that made news again this year and explains why despite slowing economy the Sensex had been booming.

The year was marred by a growth crisis marked by an alarming slip slide quarter after – from low consumption demand, poor employment to a financial system that’s still in a lock-jam. 

Growth: From question mark to ICU 

Economic growth hit an over six-year low of 4.5% in the September quarter and seems like it’s stuck in a sub 5% groove. Most building blocks of the economy, especially manufacturing are struggling. All eyes – local and global will be on India next year, to see what can be done to salvage the situation. 

Inflation rears its head again

As if a growth scare wasn’t bad enough, inflation has slowly but surely reared its head again. By November this year, retail inflation jumped to a 40-month high riding on higher food prices. Unusually heavy rains hit crop yields and caused a spurt in prices of vegetables including an alarming rise in onion prices. Stagflation is now a real fear for the country – a situation characterised by slow economic growth and high unemployment, or economic stagnation, and rising prices – essentially the worst recipe for a country like India.


The numbers tell a chilling story. October unemployment rates shot up to 8.5%, the highest in over three years. Even worse, the situation for the youth of this country. Unemployment rates for that section are bubbling at close to 17%. 

Rural India and the agrarian crisis 

The slowdown has hit rural India the hardest. From the middle of the decade, a deep agrarian crisis has set in. It’s a toxic cocktail – consecutive crop failure has pulled down overall agricultural growth even as  agricultural lending kept growing. Earnings in the hands of rural India have been falling over the last few years. Cash-strapped, distressed and left with no resilience to cope with the situation. This is the saddest tale in India’s economic decimation. 

PMC Bank fraud 

Dummy accounts, a mountain of undetected bad loans and deep corruption all led to hundreds of ordinary citizens finding themselves locked out of their own money at PMC Bank. Working hand in glove with real estate major HDIL, PMC bank systematically duped both the system and it’s account holders, for whom 2019 will be a bitter and painful memory. 

India Inc: Drowning in debt 

Caught in a spiral of pledging their shares to access loans and then defaulting, many well-known promoters were wrenched out of their companies this year. The fortunes of promoters like Zee’s Subhash Chandra and Reliance Group’s Anil Ambani are on the line and 2019 has taken down other faces like Yes Bank’s Rana Kapoor. Most tragic amongst these stories is that of Cafe Coffee Day’s V.G. Siddhartha who committed suicide when he saw no way out from the debt trap.

Tatas vs Cyrus Mistry

Boardroom drama continued to other facets as well. In a shock ruling for the Tata group, the NCLAT ordered the reinstatement of Cyrus Mistry as the Executive Chairman of Tata Sons – a post from which he was ousted following a boardroom coup in 2016. It also said that turning Tata Sons into private company was unlawful and ordered a reversal. The battle is clearly not over and over the next few weeks, the Tatas will go head to head legally, with the Shapoorji Pallonji family, in order to protect their turf. 

Resurgence of the IPO

Small was beautiful for the primary market. Issues like Ujjivan Small Finance Bank and IRCTC saw huge oversubscription and handsome listing day returns. In fact, 14 mainboard IPOs this year have risen by an average of more than 50% since listing – companies like IRCTC, IndiaMART , Affle  and Polycab India – have doubled their money post their stock debuts. 

The stock market vs growth conundrum

The stock market has had most economy watchers left scratching their heads. As growth plunged to new depths, the headline indices went higher and higher. But even a cursory glance at the market will reveal how narrow and exclusionary the rally has been. The Sensex has risen about 12% from a low in September, with just three names, Reliance Industries, ICICI Bank  and HDFC Bank — accounting for 61% of all the gains. The broader market has lagged behind on valuation and price, and the midcap index closes the year in the red. 

Economy and the State: Reboot, reboot, reboot 

This year, India got two budgets sandwiched between the general election results. However, since the July budget, several key decisions announced were either scaled back – or have simply not been able to get their feet off the ground. The controversial angel tax and surcharge on capital gains for foreign portfolio investors had to be pulled back, an ambitious plan to issue overseas sovereign bonds didn’t get approval either.

More importantly, the upcoming budget will raise crucial questions on how and where the government plans to spend money given how poor revenue collections have been and the dismal state of the fiscal deficit.