oppn parties Where Is The Economy Headed?

News Snippets

  • Supreme Court sentences Congress leader Navjot Singh Sidhu to one year rigorous imprisonment in the 1988 road rage case
  • Home Minister Amit Shah says rights should not be demanded before fulfilling responsibilities and that universities are no place to wage ideological battles
  • NIA court convicts JKLF chief Yasin Malik in terror funding case after he pleads guilty of all charges
  • A study backed by PM-EAC has recommended universal basic income and urban job guarantee and greater spend on social sector schemes
  • Supreme Court rules that the decisions of the GST Council are not binding on the Centre and the states, leaving the door open for states to levy further taxes
  • After sustained campaign by BJP MP Arjun Singh, the Centre today withdrew the jute price cap order, industry welcomes move
  • Akasa Air might postpone its July launch due to late arrival of aircrafts
  • Metro Cash & Carry decides to sell Indian operations. All major players, including Reliance retail and Amazon, are likely to bid
  • Local and global cues spook the markets on Friday - Sensex crashes 1416 points to 52792 and Nifty by 430 points to 15809
  • IPL: RCB crushes GT by 8 wickets as Virat Kohli returns to form with a well-made half century
  • Nikhat Zareen is world champion in flyweight category. Wins gold at Women's World Championships at Instanbul
  • Supreme Court uses its special powers under Article 124 to release A G Perarivalan, a Rajiv Gandhi assassination convict
  • Indrani Mukherjea, prime accused in the Sheena Bora murder case, gets bail from Supreme Court after 6.5 years in jail
  • Hardik Patel quits Congress, says top leaders distracted by mobile phones and state leadership busy arranging 'chicken sandwiches' for them
  • Anil Baijal resigns as Lieutenant Governor of Delhi citing "personal reasons"
Nikhat Zareen is crowned world champion in the flyweight (52Kg) category at the Women's World Championships in Istanbul /////// Supreme Court sentences Navjot Singh Sidhu to rigorous imprisonment of one year in the road rage case /////// Sunil Jakhar, who quit the Congress a few days ago, joins the BJP
oppn parties
Where Is The Economy Headed?

By Ashwini Agarwal
First publised on 2018-06-18 08:41:09

The economy is showing signs of revival and it is reflected in the industrial production figures that grew 4.9 percent in April after reaching a five-month low in March. This means that demand for goods and services is rising and that it out hope for creation of jobs, one thing that the present government has not managed to bring on track. But this good news is also tempered by extremely low or negative growth in sectors like agriculture, fishing and mining. While mining is suffering from the effects of large scale corruption in licensing and the resultant court cases, if agriculture – the sector that provides jobs to nearly half of the workforce – does not take off and if farm distress continues, jobs created in factories or the service sector will not be enough as a large number of people will be rendered unemployed from agriculture. The only ray of hope is that the Met has predicted a normal-to-good monsoon and it might help in reviving the sector and lessening farm distress.

On the other hand, hardening of oil and commodity prices have meant that the consumer price index (CPI) is rising faster than expected. As producers battle with rising input costs, they are unable to absorb it in the face of thin margins and product prices are increasing across the board. Couple this with rising prices of daily essentials and farm produce such as vegetables and fruits and the problem being faced by households is clear. In fact, most households surveyed by the RBI expect the CPI to rise faster in the coming months and reach its peak during the festival season in September-October.

The government has to work fast in introducing further reforms. It also has to step up investments in the renewable energy sector so that reliance on fossil fuels is decreased. If inflation rises beyond a comfortable level, the RBI will have to follow a tight money policy to suck out excess cash from the economy. Prices are not likely to fall soon because even if the monsoon is good and the farms produce more, the effects will show only during September-October. By that time, the festival season will push up demand to bring us back to square one.