Dinesh Kamath's news 'Our economy in slowdown mode' that was published in Newsband

Our economy in slowdown mode

The economy is indeed in slowdown mode and needs to be fixed. Various reasons had contributed to the slowdown of growth rate. It is necessary for Economic Advisory Council (EAC) to swing into action.  

The EAC cannot take chances. There is need for fresh investment and job creation to take place. The consistent decline in capital formation over the last five years needs to be reversed. Above all, the EAC should take cognisance of the fact that the troubles of the informal sector are not fully reflected in growth statistics.

The EAC’s focus areas should be monetary policy, fiscal policy, the social sector, agriculture, the informal sector, “patterns of production and consumption” and much else.

The crisis in Small and Medium sized Enterprises (SMEs) is as a result of implementation of GST which has come as a double whammy after demonetisation. The EAC should, along with the finance ministry, reach out to industry representatives and address their concerns. Demonetisation and GST may have triggered a downward spiral of consumption and investment

The slowdown is being caused by the note ban and GST introduction. Private investment is affected and business society concentrate on how to cope up themselves with note ban effect and to comply the GST norms and filing returns. Business doing optimism is being lost and government has to revive that by making GST laws easy.

The EAC should take cognisance of troubles of the informal sector which creates much more employment than corporates. The usual parameters of growth like GDP, fiscal deficit , oil prices, imports and exports need not be fully reflective of Indian ground realities. After all about 58 % of the Indian wealth is owned by 1% of the population which means, even if there is growth, there is no guarantee that the poor will be automatically benefitted.

For those socially concerned, Indian position of 100^th rank in the hunger index of 119 nations is more discouraging than the GDP numbers. Ghana, Myanmar, Bangladesh and Nepal rank better than India and India is only slightly better than Pakistan. Claims of fastest growth in the world, mean nothing and even an insult to the poor masses.

That neither NDA nor UPA is interested in talking in terms of our international ranks in social welfare indices, shows clearly that our Governments are addressing social security poorly. it is good that the NDA government has made a beginning by admitting that there is a slowdown in the economy. Hopefully, necessary steps will be taken by the government to revive economy. Who among the opposition parties' leaders is interested in revival of economy? Difficulties associated with GST need to be tackled first. But cooperation of all stakeholders is a must.

The Congress and other opposition parties appear to be least concerned about the slowdown - they are more interested in finding out how to embarrass the NDA government and PM Narendra Modi and FM Arun Jaitley in particular. Criticism of former Union Finance Minister is good example of this attitude.

The State governments too have to join efforts to revive economy. Here again, there is a clear divide. Citizens are simply dismayed by the politicians' conduct. When would our leaders show maturity and join hands to solve problems?

Opposition parties, now or in the past, were never interested doing anything for India. No; they want to be the ruling party, bring in their relatives and friends and continue whatever has been going on for last 70 years. Sorry, we do not need to replace Modi with such people to improve the economy.