Big shock to Indian economy. GDP growth rate has fallen drastically. It is the lowest since last 6 years. It is a big setback. Though Government took lot of corrective measures in the last few days, its results will generate only in the medium term. 5% growth gives wrong signals to the world capital. Though everyone expected slow growth rate in this quarter, It is not expected 5%. Ease of doing business measures alone will not attract international capital. They must feel confidence and good return of its investment. If you track the history, the international business never bother about political system whether it is democratic, whether it is providing human rights etc. What it looks is the stability of political system irrespective of its shape and strong leadership to speedy implementation of decisions are major factors along with the ease of doing business. Now, we have strong leadership, better ease of doing business norms but confidence on speedy implementation without bureaucratic interventions and hurdles is still miles away.
There is a hope and confidence about bright future even now as opined just yesterday. Investment opportunities have been strengthened in Budget and also in recent announcements. So, in the medium and long term, India's future is bright in the midst of global slowdown. Reasons are many for short term downfall. Consumption has come down, Investment climate is yet to pick up, Rural distress still prevails, global climate is adverse, Sino- Chinese trade war impacts even our economy in the limited way. The major worrisome factor is manufacturing sector's growth almost reached zero. This is to be further studied what made the sector to fall such a drastic way. Silver lining is Electricity and power generation growth has picked up. There is urgent need of some drastic short term measures to nullify the trend and put the economy once again on the right track.Till now, we are more interested in fiscal prudence. Now, it is the time to ignore it and provide fiscal stimulus as a short term measure. There is no alternative to this. Government expenditure must be stepped up. As it seems the slowdown is more than cyclical, fiscal stimulus is must. The one factor which is interesting in these circumstances is controlled inflation. That gives lot of solace in this crucial moment. Whatever may be the future of medium and long term, we are really worried about the present situation and it is time to go for strong short term measures to come out of this crisis.