During the last few weeks, there have been several “ scholarly” discussions and articles in the media that Indian economy has now slowed down and some of these commentators go to the extent of saying that India is now facing a grim economic crisis that is unlikely to go away in the near future.
Such critics are those who belong to opposition political parties who have vested interests in criticizing whatever the Narendra Modi government is doing .on the economic and political front. There are also handful of people in the BJP party itself who could not get positions in the government which they aspired for. There are, of course, journalists and anchors in TV media, who are jack of all trades and master of none. There are also a few “intellectuals” who are half politicians and pledged critics of Modi government and who have never approved any of the decisions of Modi government in the past.
One thing that is obvious in the criticism is that the critics have no facts and figures to substantiate their views but only have vague views and opinions to support the criticism.
What is very unfortunate is that the former Prime Minister Manmohan Singh too has voiced vague criticism and making one suspect that he has greater loyalty to the political party that he belongs to rather than to economic fundamentals and ground realities that he should know due to the past positions that he has held .
What is very conspicuous about the stand of the critics including Dr. Manmohan Singh is that they have no solution or constructive suggestions to offer and do not care to explain what would they do if they were to be in power today.
All the critics point out that during the last quarter, GDP growth has come down to 5%. They try to give an impression as if the economic growth has stopped. But, the fact is that growth is still taking place at 5%. But, what is being ignored by the critics is that GDP growth cannot be assessed or commented upon based on the performance in three months or six months. There have been number of instances in the past when GDP growth has reduced in some period due to several inter related reasons and picked up later on to satisfactory level.
After loudly pointing out about the GDP growth of 5%, the critics say that the sales of automobile industry has dropped. They point out to the lay off of a few days by a few automobile companies to avoid stock accumulation. This is not the first time that this is happening. No automobile unit has closed down or remain closed for extended period due to sales drop.
Any student of management would know that based on expected growth rate in demand , new industrial capacities will be built to meet the future demand. Since there are minimum economic capacity for the industrial units, it often happens that the capacity build up would not match exactly the immediate growth in demand and the industrial units expanding capacity need to wait until the demand would catch up with the capacity created, as the economic growth and percapita income growth would continue . This is what is happening in automobile industry today.
In India where still around 30% of population remain below poverty level and the buying capacity of large section of people are not high, it appears that many people in the affordable income group already possess two wheelers or four wheelers to a large extent. Further, while more automobile units are coming up on the road, the expansion of the road network is not matching it, which causes more accidents almost on daily basis., creating fear amongst people about owning and driving vehicles. This is what Finance Minister explained when she said that with the advent of Ola and Ubher taxis providing comfortable travel, some people choose to use these taxis rather than buying vehicles.
Further, unlike the developed countries, life of automobiles in India are fairly long and it is not unusual to see many two wheelers, three wheelers and four wheelers running on the road which are more than 20 year old. Scrapping of the old vehicles is still uncommon in India, making the number of automobiles on the road swell steeply.
There is nothing wrong basically with the automobile and auto component industry in India and the sales would increase and catch up with the demand picking up with steady economic growth, which is a logical sequence of events.
Apart from automobile sector as a subject for the critics, they bank on demonetization and GST measures of Modi government saying that they have crippled the economy. This is totally untrue and without any basis. Demonetisation is a necessary step , as confirmed by many persons including former Governors of Reserve Bank of India. GST measure is an extraordinary progressive step implemented by the Modi government. All state governments representing different political parties are party to the GST decisions.
Finally, the critics bank on the so called unemployment crisis. Who have the reliable figures ? Every critic banks on the increasing number of people registered with the employment exchange. The fact is that many people registered with employment exchange are not really unemployed people or starving people. Most of them seek better opportunities in government departments and public sector organisations, where the salaries and wages are high and job pressure on employees are much less. New people register with the employment exchange , even as people already registered with the employment ex change but who are not really unemployed do not delete their names.
Even as the critics shout from the roof top about unemployment, the fact is that there is serious situation of lack of skilled people with many jobs remaining unfilled. It is not uncommon to see several jobs waiting for lack of skilled workers to carry out.
The pledged critics of Modi government are doing enormous damage to the morale of the country men by voicing false allegations about slow down in the national economy. With the helpful media all the time eager to give space to the negative views and sensational utterances., the pledged critics now have a field day.
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