During the April-June quarter of the current financial year, the country experienced a 23.9 per cent economic slowdown, adding to the concerns of the COVID-19 period. The answers given by the Central Government to the question of what is being done to regain growth are not satisfactory.
Compared to the first quarter of the previous year, the GDP has declined by 23.9 per cent. The last financial year has seen a slowdown in growth. With the advent ofCOVID, growth had disappeared and the recession had started.
Even before the corona attack, our economy was in a weak state. Due to the lock-down following COVID, economic activity fell sharply and the economy was hit harder. The country experienced a bigger economic downturn in the first quarter than predicted by various studies. Only the agricultural sector has seen growth. The economy is becoming more dependent on agricultural activities than usual. The good monsoon has paved the way for the growth in the agriculture sector.
According to SBI, the country’s largest bank, the country is expected to experience a 10.9 per cent recession in the current fiscal. The report predicts a slowdown in the July-September quarter.
The central government needs to address this issue by recognising the reasons why the economy has been weaker than expected despite the expected slowdown. Even before COVID, the state of the economy was bad. We have been facing a situation where the economy has been struggling for a few years now due to the ban on notes and the shortcomings in the implementation of the GST. Last year saw the highest unemployment rate in the last 45 years. The corona came like thunder out of the clear blue sky at a time when the labour market and the small business community were in crisis. Prolonging the lockdown has exacerbated fundamental financial problems.
The endless opportunities for small businesses that are unique to India are disappearing. Cosmetic interventions are not enough at a time when wartime solutions need to be found to revive the economy. Interventions are urgently necessary to move the market, which has lost grounds due to the repercussions and lockdowns created by COVID-19.
The Prime Minister’s ‘Atmanirbhar Bharat’ announced in May was claimed to be a package of 10 per cent of GDP. But the new expenditure from the government for this package is only Rs.1.5 lakh crore. Even when corporate tax cuts were made last year, the government spent Rs.1.45 lakh crore. That’s about the same amount as government spending on the ‘self-sufficient’ package. That is, only 1-1.2 per cent of GDP. With such a plan, the current severe economic downturn cannot be eliminated. We can only recover from the recession if the government initiates a strong package with a long-term vision.
