What did the data released by Ministry of Statistics and Programme
Implementation indicate?
The
Ministry of Statistics and Programme Implementation, released a data, on
Monday, which indicated India’s GDP, that stands for Gross Domestic Product’s
growth rate, had fallen by 23.9% from April to June. If we are to speak of
gross value-added terms, the data revealed fall in the economy by 22.8%. The
data clearly suggested declining economy of India.
To
add to people’s dismay, with revision of the estimates by the help of data
better in quality, the numbers are expected to fall even more drastically.
Have India faced this kind of situation before?
Seeing
India’s history, India hasn’t witnessed this kind of circumstances before.
India has never seen its economy decline over the last 40 years. India has
published its quarterly GDP data since 1996 and this remains the first case of
negative growth. This has affected MSMEs as a result, as well.
What views did the higher authorities give on this matter?
The
government presented its concern regarding this mentioning this as a rare case
that occurs once in one and a half century. The government’s chief economic
advisor explained the major reason behind the fall of country’s economy being
exogenous factors such as ongoing COVID-19 pandemic and lockdown.
Finance
Minister Nirmala Sitharam blamed India’s declining economy to be an act of god.
The
government presents its opinion that the virus not only affected India but has led
to the major setback of many strong countries. So, it was nothing unique for
India to face this loss.
The
online supporters, under the leadership of Bharatiya Janta Party, have affirmed
that the India’s slowdown was less dramatic compared to the likes of strong
nations like USA. Anybody else speaking of something else, they said him/her to
be spreading fake news.
An economics and finance writer Vivek Kaul, presented his views that the
facts were for all to see. Because of pandemic, it of course has slowed down
almost entire world but compared to likes of other comparable countries,
India’s economic decline has been significantly high. For example, In USA, the
year-on-year quarterly fall- % change from the same quarter the previous year
was 9.1% which is way less than compared to India’s 23.9%. He spoke this to be worse
than any other economic powerhouse nations.
What can be the reason behind this drastic fall of India’s
economy?
Coronavirus has spared no one, be it, a big or small country. The
lockdown India imposed was one of the harshest in entire world, which led to
the economic activities to standstill. People blame this as the major reason.
Kaul presented his views that the Prime Minister Narendra Modi, imposed
lockdown rather swiftly and without brainstorming on it.
Other people speak this only to be an acceleration of already existent loss,
way before the pandemic begun. Joydeep Baruah, an economist for the
Guwahati-based Omeo Kumar Das Institute of Social Change and Development, spoke
that COVID-19 definitely played some role but the country’s economy had started
to decline before this, which is clearly suggested by even government’s own
data. He also mentioned that since 2016-17, there have been clear signs of
country’s economy fall, reflected both
in government’s quarterly as well as annual data. He pointed out this
deceleration to be spread across all sectors. He further spoke it all to be
pervasive.
Baruah claimed that because of already falling economy of the country, it
couldn’t deal with the pandemic that came in suddenly as a shock. He further
added that provided the country’s enough economic resilience, it could have
digested some of the consequences that came in because of pandemic coming as a
sudden shock but as Indian economy was in a declining state for continuous 2
years, when the COVID hit the country.
However, overcoming the current situation immediately doesn’t seem likely
possible. The only way out could be government spending. But The Indian Express
pointed out that even before COVID crisis, the finances of government were
overextended i.e. the government was not only borrowing but borrowed more than
it should have. As its consequence, country has no enough funds today.
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