GDP Data and the Fall of fastest growing Economy
Once there is a change of leadership in the Indian government in 2014, a lot of advertisement such as Make in India, Clean India, Digital India, Fastest growing Economy
and all other project making new India every day has all been Shattered by COVID and Extremely poor governance.
Let’s see the context in detail.
India has always been the largest country living below the poverty line. In 2004-2014, India has been the drastic movement from the poor and one of the fastest-growing economies
even though the latter part of the Congress government has been shaky and poor. But this government has made it clear that Congress is far better when it comes to financial
management. The government headed by Manmohan Singh always had hopes and actions when there is any dent in the financial system. This government has completely broken
the system into pieces and thanks to COVID to make it quick, so this will be easy to blame on the pandemic.
With the latest GDP figures, India went 5 years backward to 2015 zones and it needs extreme stimulus to get to pre-COVID levels in the next 2-3 years.
4 reasons Why the Financial system went broke?
- Poor governance in Stopping the disease to Spread:
Even after the rapid news and spread of lethal nature and spread of the virus, the Government never took it seriously until March 15 of 2020. Several countries took
necessary measures to stop people coming from foreign countries. This caused the Virus to spread before the government even started thinking about the disease leave apart the actions taken.
- Taking people to Panic Mode:
Suddenly after knowing about the spread, the government took steps to stop people from moving out for 45 days making people panic mode. This made migrant Labours of about 20 million
people across India in serious trouble. Nothing moved and the economy stopped moving and System stopped totally. No relief measures were taken to move people to their stable zone. No economic support was given for 15-20 days. Later announced 500 rupees(7$) as relief from the central government. There is no other joke than calling this amount as a relief measure. Some states were able to add funds and making relief to around 1000 rupees( 15$). US government provided 2000$ dollars to around 10% of the family. Most developed countries contributed 19% of their quarterly GDP as relief measures. India gave 1.2% of the GDP as the relief measure. No kidding, right?
- Breaking down Spending of people:
People in panic mode started buying only basic necessary goods and moved to extreme saving mode. Many skipped a meal and only had 2 meals per day. many had only
cheap glucose biscuits(Thanks to them). The local police were given the power to stop people from moving causing the retail inflation to increase drastically. But the
manufacturer and farmers were piling up inventory and got the products stagnated and made them sell at a low price. As always bribing of local politician are the only
possible way to move the resource from manufacturer to seller made the increase of the price of even essentials.
- Complete breakdown:
Around the end of the first quarter, inflation increased by 6% and the GDP decreased by 24%. So Net fall is 30% of the economy. The average growth of 6% per annum is broke and the expected growth of this
year is -10%. So India lasts 2 valuable years in the growth phase causing irreparable damage to the economy. The reality of the situation is essential goods and services were overinflated and people are starving. people could not pay their EMI and go broke. Expecting around 3 Million defaulters in the 3rd quarter will make a big wave of economic collapse. The stock market making a V-shaped recovery will be washed out and many small companies will file for bankruptcy in 1 year.