Political Turmoil – 01 / 2020 19 January 2020

Friends & Critics                                                              

MO-SHA :- You have been very active brought in      (a) – Teen Talaq,         (b) – Abrogation & 35-A in J&K (Literally decimation of J&K from a full status of a State to a UT)         (c)- You succeeded in the battle of RAM MANDIR and you are in the process of Bringing in SCARY – CAA, NRC and NPR.

Highly appreciated but you have completely missed out         (a) Rising Inflation       (b) Farmers Crises       (c) High Rate of Unemployment .

THIS IS HOW A SENIOR AND WELL KNOWN ECONOMIST EXPLAINS – (SWAMINATHAN S AIYAR)

“ Sliding economy needs serious structural fixes  - When Narendra Modi was re-elected, optimists expected GDP growth to accelerate to 8%. Alas, it is plummeting towards 4% having fallen steadily in the last four quarters – 7%, 6.8%, 5.6% and 5%.

Expect a further fall to almost 4% when the July-September figures come out. The Index of Industrial production was minus 4.3% in September, the worst in a decade, with 17 of 23 industrial categories recording declines. Capital goods output (representing fresh investment declined 20.7%, GDP growth is approaching the 3.9% low of the Great Recession of 2008-09).

One reason is cyclical. The slowing world economy is pulling India down too. But India also has serious structural flaws that will not mend easily, Unless mended, the new growth normal for India may be closer to 5% than the “miracle economy” benchmark of 7%. Former chief economic adviser Arvind Subramanian once theorized that statistical flaws were inflating official GDP growth by 2.5%. He said the distinct slowdown after 2011- an later in four Indicators- exports, imports, electricity and credit growth – suggested GDP growth was between 3.5% and 5.5%, far lower than the official 7%.

In the short run, there is a case for fiscal stimulus. The fiscal deficit can be allowed to rise to anything up to 4% for this year. But history shows how difficult it is to end a stimulus, so caution is needed on this front, In any event we need to focus more on the long-term than short-term issues. Otherwise the days of miracle 7% growth will be over.

Snippets

A-    A Lutyens Bubble- Becoming a $ 5 trillion economy in five years needs us growing at 14% every year.  Says Kanti Bajpai.

B-     A BJP Neta in anger stated “MODI JI IS A GREAT ORATOR BUT HE IS NOT AN ECONOMIST – HE IS ONLY A PHENKUNOMIST”

Wake up India.