How India's economy got affected after coming of new government (BJP)?
Answers
1) India's GDP growth has touched 5 per centto a six-year low in the April-June quarter. The alarm bells were ringing prominently when growth had slowed to 5.8 per cent in the previous quarter, but a carnival of political issues overshadowed economic slowdown. While in nominal terms, India's gross domestic product (GDP) grew by 7.99 per cent, which is the lowest since December 2002.
2) Almost all Indian sectors including auto, manufacturing, agriculture, FMCG, real estate and construction have slumped badly, and official data released by the National Statistics Office (NSO) confirm that. Weaker consumer demand and slowing private investments are the two key factors behind the ordeal of core Indian sectors, many of which have openly come out openly with S.O.S signals. Meanwhile, eight core sectors have registered negative growth of just 2.1 per cent in July, compared to 7.3 per cent in the corresponding month a year ago. All of these indicators also explain the reason behind the recent jump in job losses. According to the Centre for Monitoring Indian Economy (CMIE), overall unemployment in India has now touched 8.2 per cent, with urban figure as high as 9.4 per cent.
3) Indian investors have also become wary of the slowing economic growth as major companies, especially from the auto sector, have been posting huge dips in profit and even losses in many cases. Not just domestic investors but foreign investors are also constantly pulling out capital from the Indian market. FPIs have pulled out a net amount of Rs 5,920 crore in August even after the government announced a rollback of enhanced surcharge on FPIs.
4) All major Indian companies--from biscuit to vehicle manufacturers--have seen their fortunes dip over the last few quarters, forcing them to eventually call out to the government for support. The lending crunch in the market has deeply impacted almost all sectors that play a leading role in driving the Indian economy.
5) Meanwhile, the Indian rupee has again become one of the worst-performing Asian currencies after depreciating 3.65 per cent against the dollar in August. This, too, is the steepest decline in the Indian currency in the last six years. The value of the rupee has hit Rs 71.98 against the dollar at present. According to global brokerage firm Nomura, weakness of the rupee is a reflection of the underperformance of high-yielding emerging markets foreign exchange, weakness in equities and recent policy actions.
These are just a few points that represent the situation of the Indian economy at the moment. It could become much worse if healing measures are not introduced quickly to mitigate the effects of a looming global economic crisis. The economic crisis may hit prominent economies around the world starting with the US as early as 2020, according to a survey of top US economists conducted by the National Association for Business Economics (NABE).
Even as top economists and brokerage firms in the country have been urging the government to focus on boosting investments to drive growth, the government has shown little intent.