The economy of India: On Economic health Friday last week NSO (National Statistics Organization) released data on GDP first quarter. It is 5%, which is biggest drop for a long time. This comes amid reports of a general slowdown in the economy across sectors.
To understand what is really happening in the economy? And why has it slowed down also what could be the possible way out we try to understand in this article?
So first and most important what do these GDP figures mean and what does it tell us about the Indian economy?
The figure NSO released is the lowest in the last 25 quarters. Last time in March 2013 figures were 4.4%. But it would be abruptly saying fall of GDP happens quickly, which is not the case. Since June 2018 our growth rate is slowing down. And it is the fifth consecutive quarter when the fall in GDP has been registered.
It is from 1997 it is the second time when there is a fall in GDP for consecutive five quarters. That showcases slowdown not only big and worrying but also it has been happening for a very long time. Many economists, writers were predicting that this has been coming. Unfortunately, policymaking establishment has now acknowledged it officially.
Many argue that it is a cyclical slowdown and come after a fixed time period. But the way it is happening it seems structural slowdown.
What government has taken measures may satisfy some businesses but overall may not bring much change. We are actually facing a demand problem. Government is trying to keep the inflation rate low. That is indirectly affecting our agricultural sector and resulting in rural slow down in the economy of India.