Present Economic Indicators Appear Far from Satisfactory!

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  • Keen observers of the Indian economy over the last few months, especially following the draconian lockdowns at the beginning of the financial year 2020-21, would be grossly concerned with the evolving situation now. As the country went into lockdowns and the subsequent negative repercussions on the economy need no further elaboration for the challenges and hardships encountered since then continues to pose serious questions even now. The record contraction of the GDP for the financial year 20-21, more specifically in the first two quarters, was not only heartbreaking but also body-blow to the economy desperately making efforts to redeem.

PC: Kirtika Suneja

  • Indeed, a slew of measures undertaken by the Union Finance Ministry did provide a comprehensive roadmap to pull the stuttering economy on the road to recovery. Visible signs of economic green shoots during the third and the fourth quarter did raise the hopes of reducing the counterproductive effects of the contraction to a great extent. However, the resurgence of the second Covid wave with never heard before scaling of confirmed infection rates is proving to be a big dampener as also raising a specter of imminent lockdowns yet again severely denting the confidence of the industries to stay afloat.
  • Most dishearteningly, few states led by crucial Maharashtra have already resorted to enforcing lockdowns to halt the extremely fast-spreading infection thereby giving credence to the already suffering economy taking a further hit. Thus, India’s economic policymakers are confronted with hazy visibility with unfolding scenarios appearing anything but comforting. Note that monthly indicators such as industrial output and consumer inflation are indeed worrisome. Thankfully, indirect tax collection is reported to be higher than expected. On the flip side, a series of lockdowns imposed by states will surely undo some of the economic gains of the last six months.

PC:  Akankshya Mahapatra

  • Caught between the devil and the deep sea of sustaining economic growth as well as curbing the steep rise in the infection rates, the Union and State governments are staring at a challenging period that does not portend any standard solutions on its own. What is worrying is the negative data flow spanning industrial output and consumer inflation witnessed this week. Industrial output in February contracted 3.6% concerning the same period last year. Of course, the decline that happened before the present series of lockdowns began raising doubts over the durability of economic resurgence recorded towards the end of 2020.
  • Also concerning is the core consumer inflation data which is at an elevated level of 5.52%, not driven by food and fuel, and unlikely to influence RBI’s monetary policy of low interest rates for domestic savers. The most potent way to improve the distressing situation is to initiate measures to limit the damage of the latest movement curbs. Note that the lockdown has proved to be blunt instruments suffocating the workers employed in the informal sector. Weaning away millions of people engaged in agriculture to more productive sectors should be prioritized. Hopefully, the move will stabilize the environment for sound economic policymaking. Keeping fingers crossed!

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Krishna MV
Krishna is a Post Graduate with specialization in English Literature and Human Resource Management, respectively. Having served the Indian Air Force with distinction for 16 years, Armed Forces background definitely played a very major role in shaping as to who & what he is right now. Presently, he is employed as The Administrator of a well known educational institute in Bangalore. He is passionate about sharing thoughts by writing articles on the current affairs / topics with insightful dissection and offering counter / alternate views thrown in for good measure. Also, passionate about Cricket, Music – especially vintage Kannada & Hindi film songs, reading – non-fictional & Self-Help Books, and of course, fitness without compromising on the culinary pleasures.