Now a days, more news are pouring on Indian economy due to its slowdown. Of course, there is no controversy/dispute on the slow down. At least, it is one news where everybody agrees that there is slow down in Indian economy but again basing on GDP growth rate ( Though it is not respectable/ credible basis to measure in other respects!). Slow down or Spurt in growth is basic phenomena in market economy. Now Indian economy is facing the phase of slowdown due to multiple factors. Two important aspects in this slowdown are private investment and consumption demand. All the other factors can be related to these two fundamental game changers.
Government took series of measures to address these two. On supply side, major reform was undertaken by reducing the Corporate tax. On demand side, money was pumped into farmers account to provide some relief. Of course, there are several other measures taken to address the problems on both the sides. Many people are questioning the policies of the Government without giving solid solutions to the problem.
History proved that the countries where economic boom took place undergone major structural reforms. In India, it is very difficult to undertake structural reforms. Nobody either opposition or intellectual sections will not give breathing/ cooling time before analysing the results. The growth in industrial sector requires reforms in land, labour front for which the same sections who are criticising now will come in the way of implementation. In Agriculture sector, present fragmentation is the main stumbling block for high growth. Huge Capital investment is required in this sector for which again there will be resistance as usual. Likewise, huge investments are required in Infrastructure. All these measures require massive capital which is possible only with Public-Private partnership. Again, this is a big controversial point in our country. For example, only Railways require lakhs of Crores of investment. But the public mood is not to bring private capital in to this sector. These are the contradictions in our growth path.
Despite all these limitations, India progressed well in the last two decades with some bad patches in between. In the last one and half years, the cycle is moving slow. Reasons are many. Without going into all these aspects which requires an elaborate space, one thing is sure that our economy is going to rebound very soon. It is the assessment of all international financial /rating agencies. IMF projections released yesterday revealed the same. This year , the growth will be 6.1% whereas next year , it will be 7%. China 's projections are 6.1% for this year and 5.8% for next year. US reaches 2.4% for this year and slide down to 2.1% for next year. Overall, world witnesses slide down to 3% this year and reaches 3.4% next year. Our contribution for global growth next year is significant in the light of declining trend from both US and China. All our critics are highlighting the first one and ignoring the second one. Whether it is IMF or World Bank or Moody's or some other agency, all of them are telling with one voice that future belongs to India. This aspect is missing in the reports.
It is not the intention to cover up the present scenario. No doubt , the position is bad. Consumption demand is coming down continuously. Private investment is almost stopped. Hope that there will be improvement in these two fronts in the coming quarters. Another important aspect is that several socio-economic parameters are under circulation on the basis of international institutions. It is a fact that we are far behind other South Asian countries in many social parameters which we highlighted in the past occasions several times. But here also, different reports are emerging. Global Hunger index showed India very badly whereas Multidimensional Poverty Index ( MPI) gave India in a better position. It is an index started in the year 2010 under UNDP taking a more improved version of measurement of poverty in any country. As per this index , India is far ahead of all other South Asian countries. At the same time Global Hunger Index put us bottom of all South Asian countries. Not only that, we are far behind Sub-Saharan countries. It may be due to large population figures. India requires to work under Mission Mode and with national unity to eradicate poverty. Both Government and Opposition requires better coordination in realising this noble task.