Economic Slowdown in India - Analysis Part 3

Hey there, 

Hope you enjoyed part 1 and 2. If you haven't read them yet, do check them out here:
Economic Slowdown in India - Analysis Part 1
Economic Slowdown in India - Analysis Part 2

In this part, we shall continue to analyse some of the factors affecting the economy. At the same time, we shall also try and give a definitive conclusion to our research and analysis so far. So, here we go: 

An Incompetent Finance Minister: Now this is one factor wherein the blame can be squarely placed on the Modi-Shah duo. Earlier during the NDA-I government, the finance minister was Arun Jaitley. Throughout his term, he gave off a very uninformed vibe and it seemed as though he wasn’t really kept in the loop. On any issue, whether it be demonetization or GST, it seemed he got to know about the move only along with the rest of the world. However, if that wasn’t bad enough, in NDA-II the position of Finance Minister was given to Nirmala Sitharaman. Whether this was done to tick off a diversity box, or because they weren’t going to pay the economy much attention anyways, is anyone’s guess. But it is fairly obvious in hindsight that she was a very poor pick. She has consistently shown a picture of apathy to the condition of the general public. When asked to comment on the rising prices of onions in the country and the way that is impacting the general public, she reportedly said, “I do not eat onions”.

When she was recently asked about whether or not the benefits of a reduced crude oil price around the world will be passed on to the general population of country, she literally got up and walked off the conference. Such incidents are not helping her image, and consequently, harming India’s image worldwide. We are not the hub of the world’s outsourcing and labour needs anymore. Nirmala also displays a sheer disregard for investor and corporate interests, and her statements and assurances offer little solace to investors. Things have gotten so bad that last year, her own husband asked her to learn something from Manmohan Singh’s government and its financial policies. 

Corona: Of course, any article on the reasons for the slump in economic growth written in the current times is incomplete without mentioning Corona. It is the single largest factor that has caused one of the greatest economic recessions the world has seen this decade. The entire global economic market is in a decline. As I had mentioned in my previous article about the impact of Corona on India, the Sensex and the Nifty have dropped way below what was expected. At its lowest, the Sensex was below 26,000 and the Nifty had dropped below 7,500 points. Even though markets have begun to recover a little since the nationwide curfew was announced, we still have a long way to go until the markets can regain their former stature.

So, now that we have come to the end of the factors, what can we conclude? 

A major part of the lack of growth has been caused due to stringent measures in place to prevent accumulation or laundering of black money. Can Modi be blamed for that? No. 

Another major factor is the failure of several banks and the lack of any reassurance from the side of the government that something like this will not happen again. Can Modi be blamed for that?  In part, yes. Even though most of these issues date back to the Congress-era, Modi can definitely be blamed for not being foresighted enough to predict and attempt to mitigate these happenings. He is also at fault for choosing a weak Finance Minister. 

What about the high rate of tax evasion and excessive hoarding of undeclared income? Who’s to blame for that? It is us, the people of India, on whom the blame lies for that. We are always ready to blame Modi, the government, the system, and anything and everything under the Sun for our woes and problems. But sometimes, part of the problem lies within.

Modi may not be the answer to all our problems, but he is surely not the cause of all of them. It takes two hands to clap, so we need to do our own bit first before expecting the government or anyone else to magically solve all our problems. 

In conclusion, the blame for the current deplorable condition of the economy cannot be placed on any one person, event, or political party. There are various factors in play here, each affecting the economy in their own various little ways. Understanding a problem is the first step in solving it, and if that’s true, then today with this article, we’ve already sown the seeds of what might gradually grow to become a strong and stable economy. 

Jai Hind!

-NK