Editorial

Ideology versus economy

By Nagaland Post | Publish Date: 1/21/2020 11:53:19 AM IST

 Terming it one of the “negative surprises”, the International Monetary Fund (IMF) sharply cut India’s projected India’s growth from 7.5 percent to 4.8 percent , darkening the economic picture that the Modi government has been painting over the years. The Modi government had enjoyed a windfall from decreasing global oil prices which helped create a robust growth. The IMF expects that in the next fiscal year, India’s growth rate is expected to increase by 1 per cent to 5.8 per cent. Former finance minister P.C.Chidambaram has said that even the 4.8 per cent is after some window dressing. Chidambaram said he would not be surprised if the figure becomes lower in the next fiscal year. The latest cut follows a downward trend which reduced figure goes even lower. With the economy on a virtual tailspin due to various factors that have been solely spawned by the political-economic policies of the Modi government, the big bright picture of a $5 trillion economy appears farther and dimmer. The Indian economy is suffering through a major slowdown, and one that shows no immediate sign of easing. The only surprise is that the estimate for growth in gross domestic product last quarter isn’t even lower than the announced 4.5%. The finance ministry is expected to announce a slew of measures in the forthcoming Union Budget 2020-21 to boost consumption and revive growth. North Block officials are in the process of considering several steps such as a uniform tax rate without exemption, new slabs for those in higher-income groups, pruning personal income tax rates (in accordance with those in corporate tax). Spending more in the upcoming budget could be a tough task for the government due to lower revenues. India is also no more Asia’s fastest-growing economy, losing its position to neighbours like Bangladesh and China in 2019, due to a mix of external and internal factors. The union finance minister Nirmala Sitharaman has been on a roll-back mode on the budget in order to correct the emerging imbalances. She has a tough job ahead in presenting a manageable deficit budget. Unemployment that rose from 6.1% in 2017-18 has been the highest ever in 45 years. To pull millions out of poverty, India’s GDP needs to grow faster than even 7%. All this is however not likely to happen. The opposition has all along been accusing the government of manufacturing its statistics that do not conform to conventions. The Congress in particular has expressed serious apprehension over the government’s reported bid to revamp official statistics to account for the unorganised sector, saying no attempt should be made to “artificially boost” the rate of growth. The economy has been severely disrupted by the jolt given to it by the midnight demonetisation on November 8,2016.It broke the back of several thousand Micro, Small & Medium Enterprises (MSMEs) whose share in overall GDP is 30% . These MSMEs also make up about 45 percent of manufacturing output and around 40 percent of total exports of the country. The other contributing factor to the slowdown is the faulty implementation of a faulty GST. The states claim that as much as Rs.40,000 crore owed to them as GST has not been refunded. All in all,the government has to listen to the advices of renowned economists instead of attacking them as liberals for differing with the government.

Launched on December 3,1990. Nagaland Post is the first and highest circulated newspaper of Nagaland state. Nagaland Post is also the first newspaper in Nagaland to be published in multi-colour.

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