Indian economy heading South
            Indian economy has entered into new low. September quarter factory output ( Index of Industrial Production) has contracted to 4.3%, worst fall in 8 years. All components of output whether mining, manufacturing and electricity fell during the month. Now, economists are estimating second quarter GDP growth may go down to 4.2%.  With this trend, the annual GDP growth may come down to 5% or even less. RBI recently revised from 6.8% to 6.1%. But there are no chances of the same. Only ray of hope is service sector. It is very difficult to carry entire growth burden by service sector though its component is high. 

   Loan growth in second quarter is disturbing. It slowed down to 6%. PSU Banks loan growth falls from 8% to 5%. Private sector Banks slowdown is more significant falling from 22% to 14%. NBFCs and Housing Finance cos also slowed from 24% to 7%. Overall, credit portfolio is very bad in terms of growth though performance of Banks improved in this quarter.

    Global optimism has come down. The survey conducted by IHS Markit Global Business Outlook presented a gloomy picture. Optimism among global firms is a decade low, it says. UK just avoided recession. Germany is on the borders. China's position is not good. Today reported that inflation will peak to 5% in January in China. Only, it seems US is in better position comparatively. 

   In India, business confidence is 6 years low. National Council of Applied Economic Research ( NCAER) survey says that Business Confidence Index (BCI) declined 15.3% in this quarter. Consumer Confidence Index published in September already showed 6 year low. Demand has slowed down. There is liquidity crunch. Private investments are not coming despite several measures taken by Government. In recent past. Government addressed several pain points in different sectors. Taxes were reduced to the bottom level. On demand side, PM Kisan Samman scheme was launched. It seems that these measures are not sufficient to revive growth. Indian Government is facing toughest challenge. It is not having much space to provide more stimulus packages. Even third quarter will not be much rosy, may be slightly better than second quarter. Government should have serious introspection and turn this crisis into opportunity to bring more structural reforms in the economy. Let us all reconcile that financial year 2019-20 is one of the worst performing years in the recent past. This is the time , we all must be united and take this challenge to revive with more speed and vigour in future.