New Delhi: The recent suicide of business tycoon VG Siddharta has once again brought the India’s grim debt crisis and perhaps gloomy Indian economy to fore once again.
The recent incident of the suicide of business tycoon VG Siddharta also needs to be taken into account when discussing the health of India’s economy. The incident is not a solitary incident. It is a part of the larger problem the economy is facing today. Mounting debts are threatening the corporate. Liquidity crunch is affecting most of the companies threatening their survival. There are many other companies today which are facing the same fate as Café Coffee Day.
The Banking system in India is in shambles. It looks like there is much more under the carpet in terms of Bad loans which is again a gloomy affairs banking sector at large so also the worrisome indicator for the economy . The short term measures like infusion of equity in to banking system is not going to solve the problem but structural changes have to be made in the system.
The situation is grim and the economy is stagnant. It won’t be a surprise if we see many more incidents like that of Sidharth.
Some of the business honchos have also referred to Tax Terrorism. They are of the view that the very method of crackdown on tax evasion has not only proven futile, but also hampered entrepreneurship and the overall economic scenario in the country.
Disagreeing with the state of affairs, Rajiv Mantri in a tweet said “Highest interest rates in the world, usurious income tax rates, triple tax on dividend, tax on buy back, tax on securities transactions, progressive taxation with GST. And then we are surprised, what killed sentiment, what destroyed animal spirits.”
The issue is also slowly getting place in political debates. Rahul Gandhi has reacted sharply to the situation and reminded Modi that the economy has derailed and the train of recession coming full throttle. Rahul also dubbed Finance Minister Nirmala Sitharaman as “incompetent”.
“Mr. PM, The economy has derailed and there seems to be no light at the end of the tunnel. If your incompetent FM is telling you there is light, trust me it’s the train of a recession coming at full throttle”, Rahul tweeted.
The news and views coming from various quarters are showing pessimism in the present day affairs of the Indian Economy. The International Monetary Fund had also cut India’s GDP growth recently in the World Economic Outlook due to a downward slower domestic demand.
The International Fund pegged the country’s GDP growth to be seven percent for FY 19-20. World Bank Data says India has been pushed down to the seventh spot in World Economy ranking. In 2017, India was the fifth largest economy of the world.
Recent world Bank Data shows that in 2017 India had an economy of 2.65 trillion dollar which grew to 2.73 trillion dollar in 2018 – a tad growth when compared to the UK and France. This shows that India’s economy grew a mere 3.01 per cent in dollar terms in 2018 indicating gloomy affairs of economy.
According to some economists, the GDP figures of the government are hard to believe and that it needs to ensure the country’s statistics are accurate. Questions are being raised over the data released by the government now. The growth is slowing sharply and it was much lower than expected at 5.8% in the first quarter. The nation’s unemployment condition is staring to break all records. Industrial demand showing downward trend from quarter to quarter leading to debates whether all is well for the Indian economy.
The overall growth of the country has been hit by a drop in production of crude oil, cement, refinery products and natural gas. The core sector growth for May was also revised downwards to 4.3 percent from 5.1 percent earlier. Rahul claimed that the callousness in implementing GST and demonetisation had sent the Indian economy to the brink of meltdown.
The core sectors of the country grew by 7.8 percent in June 2018, and their cumulative growth during FY 2018-19 was 4.4 percent. The growth in April was recorded at 6.3 percent, the highest so far this fiscal.
With job cuts already started by India Inc to cut costs, the situation going to be very difficult in the coming days. According to analysts there are structural problems in the economy that would take time to turn around.