oppn parties Time To Turn Attention Towards The Economy

News Snippets

  • Rain deficit seen in India in january for the first time in 5 years
  • Heavy snowfall disrupts life in J&K, Himachal and Uttarakhand
  • Centre says Teesta Setalvad's politics is divisive and opposes her plea on conversion law
  • The ASI who shot and killed Odisha health minister Naba Kishor Das might have done so to extract revenge as the minister had rebuffed him
  • Law minister Kiren Rijiju says pleas against BBC documentary are a waste of court's precious time
  • Self-styled godman Asaram held guilty of rape and sodomy. he is already serving life term for another conviction in a rape case
  • Supreme Court to hear pleas against the ban on BBC documentary on Gujarat riots and Prime Minister Modi
  • Adani Enterprises FPO subscribed just 3% in 2 days
  • Hindenburg slams Adani response to its report, says nationalism cannot be an excuse for fraud
  • Gold hits new high in India: traded at Rs 57149 per 10 gms
  • Adani Group companies continue to bleed although Adani Enterprises reversed the trend to gain on Monday
  • Markets end positive after a highly volatile session on Monday: Sensex gains 169 points to 59500 and Nifty 44 points to 17648
  • Satellite images show significant increase in night lights in India with some states growing at 43% in 10 years and some even 400%. Economists consider this as indicator of growth
  • Bombay HC has ruled that there will be no parole for TADA victims in Maharashtra
  • Courts handed out the death sentence to 165 accused in 2022, the highest in 40 years
Investors lose Rs 5.6 lakh crore as Adani Group companies lose 29% market value in three days and the carnage is continuing
oppn parties
Time To Turn Attention Towards The Economy

By Sunil Garodia

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.

There is growing feeling in the country that  Prime Minister Narendra Modi should now sit with ministers who have portfolios related to the economy - Nirmala Sitharaman (Finance), Nitin Gadkari (Roads & Highways and Micro, Small & Medium Enterprises) and Piyush Goyal (Commerce and Industry) - instead of giving all his time to Amit Shah (Home) and Ravi Shankar Prasad (Law & Justice). This feeling is the result of a continued downward spiral in the economy. The effects of the downturn are now becoming visible on the ground in various ways and are causing concern to the common man. Before now, the subject was being discussed in boardrooms and drawing rooms of the rich. But now, it is increasingly being heard across the country in bazaars, dhabas and chai shops too. If the government does not take major steps like urgent reforms in some sectors, investor confidence is going to be shattered and India will lose a good opportunity to get big global players to relocate their manufacturing facilities in the country from China which is bearing the brunt of rising wages and a trade war with the US that is bleeding its economy.

For three successive quarters now, the GDP growth rate has been revised downwards from initial estimates despite window dressing of data by the government. Net capital formation has gone down alarmingly. Tax collection is way off the mark. There are no jobs and for the existing ones, at least at the lower and middle levels, there is no increase in salaries. Automobile industry, the bellwether of economic activity, is passing through hard times with negative growth in sales. Dealerships are closing down and factories are not hiring casual labour. Farm distress is deepening especially as the monsoon is erratic. Food inflation, controlled till now, is likely to surge as vegetables and fruits are becoming way too costly. The government simply does not have the money even if it wants to invest in infrastructure projects (a sure-fire way of giving a push to the economy). Rate cuts by the RBI have ceased to work as private investors are postponing projects due to lack of demand for products and services. The financial services sector has not come out of the shock of the mess created by the NBFCs and experts warn of a financial contagion. Exports have also not picked up.

All this, coupled with the effects of the global economic downtrend on India, needs the immediate attention of the government. The situation is such that the government will have to find the money (other than using the surplus with the RBI, for that will be sorely needed if the global economic crisis worsens like in 2008) and make immediate investments in infrastructure projects. The budget had talked of investment of Rs 1.25 lakh crore but had appointed a committee to suggest the ways to raise the funds. That committee should be converted into a fast-track unit and asked to submit its report in 30 days, 15 if possible. The government must also take a decision of the overseas sovereign bonds issue. It has also got to think about how to make private and foreign investors start investing in projects. There is no time to lose. Each passing day without major decisions on the economy is like putting one more nail in its coffin.