An economic slowdown is a situation in which the GDP growth rate of a nation decreases with more unemployment. India is now no longer the world’s fastest-growing economy as in the first quarter of the financial year 2019-20, its GDP growth rate is 5%, the slowest growth in the last six years.
The $100 billion automobile industry which employs 370 lakh people and contributes 12% to the national GDP, is suffering from a huge slowdown. Around 3lakhs jobs are lost. Eight core sectors registered a negative growth of 2.1% in July, compared to 7.3% in the corresponding month last year. According to the centre for monitoring the Indian Economy, the overall unemployment in India has now touched 8.2%, with a high urban figure of 9.4%. the ripples of the slowdown are also gradually moving to the primary sectors which are already reeling under an unprecedented confluence of pressure.
In its annual report, the Reserve Bank of India had said that the slowdown was cyclical, however, some experts believed that the slowdown is structural. The office data released by the national statistics office confirmed that weaker consumer demand and slowing private investments are the two key factors behind the Indian economy slowdown. Besides, three important contributors to this problem include Demonetisation, GST implementation and problems in the agriculture sector.
The government has announced a package of measures such as liberalising FDI for selected sectors, ensuring the flow of credits to non-banks, rollback a controversial tax surcharge on foreign portfolio investors, more capital for banks and a big-bang consolidation but still, a lot of efforts need to make India a $5 trillion economy.
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