Three almost simultaneous developments, each of which would normally have dented the government’s image in only minor ways, show how Modi’s image is beginning to lose its shine.
Analysts point out that slowdown from last quarter has intensified due to the combination of long-term slowdown and temporary shock factors like demonetisation and GST.
While GDP growth was 6.1%, belying market expectations, gross value added (GVA) growth slowed even more sharply in the fourth quarter to 5.6%. Sectors such as manufacturing and construction also took a sharp hit.
Our approach to economic growth has done more harm than good and must be be replaced with more appropriate goals.
However much Modi tries to convince people that things are better today than in the pre-NDA era, his government has struggled to make considerable progress in most areas of India’s political economy.
With the BJP winning in assembly polls on divisive and emotive issues, the government seems convinced all is well with the economy.
The 60-page report looks at the impact of the note ban on growth, inflation and a wide range of organised sectors.
The Budget appears to be pro-poor and pro-business, but it fails to address the reforms actually needed to structurally transform the economy.
From potentially slashing middle-class subsidies as a method of funding a UBI, to eyeing the RBI’s reserves as a means of creating a ‘Bad Bank’, this year’s Economic Survey tackles three pressing issues.
The impact of the contractionary demand shock triggered by the note ban will gradually radiate from cash-intensive activities to virtually every sector of the economy.
An equity firm has estimated that GDP growth will crash to 0.5% in the second half of the current financial year.
To give stagnant agricultural growth a boost, a shift must be made from concentrating on the country’s food security to focusing on the farmers’ income security.
The number of jobs created in eight select industries in 2015 was 135,000. This was much worse than the 421,000 jobs created in 2014 and the 419,000 in 2013.