ECONOMIC SLOWDOWN DUE TO MAN-MADE CRISIS: DR. MANMOHAN SINGH

inbatv News

In a video statement[1] made by former Prime Minister Dr. Manmohan Singh in which he stated that the condition of our economy is in very bad condition and it is an issue of deep worry. As the GDP growth of 5% shows a major slowdown of the economy. He said that India has the potential to have greater growth rates but due to mismanagement of functioning by the government it has resulted in the slowdown. Various points were raised by him in his statement –

  1. The slowdown is the result of crises like Demonetisation and hastily implemented GST.
  2. There are depressing demand and consumption, lower tax revenues, loss in jobs and corruption in tax collections.
  3. The surplus amount which is made by RBI is used for extreme conditions and better functioning of the system at major system flaws. Dr. Singh who has been a former RBI governor said that this record transfer of rupees 1.76 Lakh Crore from RBI to Government is not a solution to this problem and the resilience of the RBI will be tested after this record transfer is completed.
  4. Due to budget and the rollbacks made by the government, the government is reluctant to make confidence in investors and is being not able to increase its exports.
  5. Showcased figures of low inflation have cost farmers. The rural part of the country is in very bad shape as the farmers are not getting fair prices and due to which the rural income has declined. It has caused a major effect on the conditions of farmers and their income.
  6. The massive jobless growth in which there are large scale losses in the formal and informal sectors.
  7. The domestic demand is in very bad condition and the consumption growth is 18 months low.

What I understand that the causes of this economic slowdown are –

  1. Demonetization can be said to have contributed too much of the slowdown as it has created a situation wherein cash has dried up leading to a slowdown in the economy.
  2. Too Much Debt, most Public Sector Banks are saddled with high NPAs or Non-Performing Assets that have resulted in them tightening lending and instead, seeking deposits and otherwise repairing their balance sheets by making provisions for Bad Loans.
  3. The rollout of GST, GST has hampered the small businesses more than Demonetization by forcing them to withhold inventory until they migrate to the GSTN or the GST Network and become compliant with the numerous rules and regulations that are part of this tax.

Is this the conditions our citizens deserve, is this the opportunities our government was talking about, is this the path which will help us to grow. The policies and functioning of every government are not always good and fulfills the wishes of every group but maybe the thing to blame is the implementation, not the policy. Did the policymakers considered how this will impact the lives of the citizen, how it will affect them, will they accept this or not.

I think we as citizens deserve a fair implementation to curb this man-made crisis.

Submitted By-

Bibhanshu Mishra

Student Reporter, INBA

[1] https://youtu.be/JfO1AYenlgk