Our economy badly needs a boost
The Centre needs to improve the
economy considerably and keep
inflationary risks well under control. The
current fiscal year growth is
expected to be around 7 per cent. The
slowdown is a result of the shock caused by demonetisation. Growth is expected to be impacted by the
implementation of GST.
Both demonetisation and the GST implementation were disruptive moves. The
Government needs to relieve the
pain caused by them. Businesses continue to remain slow. Inflationary pressures
are returning. Petroleum product prices too are also affecting the price index. Exports have not been doing too well. Bank credit growth to industry
has also been poor.
Consumer and investor sentiments will improve if the
Government effects some feel-good policies like lowering taxes on petroleum
products addressing the problems of farmers
It is clear that the government is in the 2019 mode (which it always was)
and therefore economics be damned. In spite of good monsoon and nearing festive
season the demand is not coming up both in urban and rural areas .Even markets
with niches like automobiles moves slow thanks to the neck breaking
demonetisation effect which suppressed both supply and demand side and GST
currently reduced business doing optimism though it creates tax hurdle free
national market. Oil prices are slowly rising and current account deficit is
also on hike. Snail paced job creation and severe blow to IT sector jobs are on
card. Export is not promising when there is a dearth of working capital caused
by delay in refund of tax input credit. Instead of thinking about the bullet
train luxury let us concentrate on agriculture and industries with ease of
doing business.
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