It was over five quarters ago when the slowdown gradually began creeping into our economy. Schemes such as Make in India should be encouraged as they will help India reduce unemployment and also increase our exports. Our GDP is $ 2.6 trillion, so reaching a $ 5 trillion economy isn’t unrealistic.
I have received many suggestions recently to discuss economics. It is now more pertinent than ever because of the recently-held conference of the World Economic Forum at Davos. Two theories are circulating: first, this is a cyclical slowdown, and the second is that the world and national economy require structural reforms.
It was over five quarters ago when the slowdown gradually began creeping into our economy. Little did we anticipate it to affect and damage diverse sectors like automobiles, consumer durables, FMCG, cement, real estate and financial services in one colossal blow. By the time we realised the slowdown, our consumption, which accounts for over 70% of our Gross Domestic Product (GDP), had reduced to an all-time low further amplifying the slowdown.
What we have also failed to notice is that private investment and exports have been falling for a long time. But our economy was growing despite that owing to the consumption. But when consumption fell to an all-time low, our economy could not take it anymore and fell flat on its face from late 2018. The people responsible have missed many golden opportunities to turn the economy around by not recognising the fall in consumption but instead going down to increase private investment through various unsuccessful policies. But now we have no scope for experimentation left.
However, we have seen seasoned industrialists like Anand Mahindra who are still positive. Of course, there are issues with liquidity and debt. But, they feel the future is bright as our country is indeed showing signs of progress. Some people at Davos have been seen criticising India based on India’s social situation. It is highly ironical as they go and invest in countries that are renowned for being dictatorial. For a businessman, they will only invest when they know it will give them returns. Our GDP is $ 2.6 trillion, so reaching a $ 5 trillion economy isn’t unrealistic. Schemes such as Make in India should be encouraged as they will help India reduce unemployment and also increase our exports. So, we need a talented bunch of people who will assist the ministry and turn this dream a reality.
About Abhinav Khare
Abhinav Khare is the CEO of Asianet News Network and also the host of a daily show named Deep Dive with AK. He has a lifetime collection of books and gadgets and has already pinged more than hundred cities around the globe.
He is a tech entrepreneur, who is passionate about policy, technology, economy and philosophy from ancient India. He earned an MS Engineering from the ETH Zurich and an MBA Finance from the London Business School.
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Last Updated Jan 28, 2020, 6:47 PM IST