Sunday, February 7, 2016

The Economy is Sliding - 20 concrete points which prove that.

20 months have passed, since the Mr. Narendra Modi led BJP Government came to power, but he yet behaves as a leader in opposition clamouring for power. Wherever he goes, instead of apologizing for the misdeeds of his own Government, he yet repeats his parroted lines of blaming the opposition, especially the Congress party for everything. Recently, in a public meeting in Coimbatore, he said  "The opposition parties are showing their anger against the government in the Rajya Sabha by blocking schemes that would benefit the poor,"

While he has miserably failed to deliver on any front that deals with welfare and relief to people, he constantly tries to play petty politics in an unending electoral campaign.
Following are some worrying statistics which prove the disastrous track record of this Government in managing India’s Economy- :

1)      The Indian Economy grew at just 7.2% in the first half of the financial year 2015-16, while it grew at 7.3% in the entire financial year of 2014-15. The economic growth remained flat in the 20 months of the Modi Government. This is after the base year to calculate the GDP was revised so as to increase the numbers.

2)    The Index of Industrial Production recorded a negative 3.2 which is the lowest in four years. This is the very barometer of PM's “Make in India” dreams which is turning out to be a mere slogan just as everything else.

3)    Purchasing Manager Index fell below 50 which formally signifies that there is contraction in the manufacturing sector.

4)    2015 saw 6 months of FII outflows from capital markets, the worst since the global 2008 financial crisis. More than Rs 11126 Cr was withdrawn in the month of January, this year- worst since past 8 years.

5)    The Rupee which was at Rs 58.5 to the dollar when Mr. Modi took charge has slid to Rs 68.16 to the dollar and continues to fall precipitously. A fall of 16.5% since.
6)    Rural demand continues to be weak.

7)     Private investment is stagnant. Exports and corporate sales grew by 25-30% in the last decade; today, exports are -5% and corporate sales 0%

8)    Consumer prices (CPI inflation) are rising amidst all this due to increase in service taxes. Consumer inflation up 5.6%. Consumer inflation edged up for the fifth straight month in December on rising food prices

9)    Food inflation up 6.1%

10) Capital Goods demand contracts 24.4%.

11)  Freight Volumes by rail and sea are stagnant.

12) Cement production is weak. Core sectors are suffering.

13) New Capital Expenditure projects have shrunk.

14) New projects worth only Rs. 1 lakh crore were announced in the December 2015 quarter, down from Rs. 4 lakh crore in December 2014.  This is the lowest in the past 5 quarters.

15) The value of abandoned projects also increased by 19% in 2015 compared to the same period in 2014. The transport infrastructure and storage sector accounted for 60% of these abandoned projects.

16) Confidence of India Inc is fast fading.

17) 1 million Indians entering job markets in India have no opportunities. Jobs have contracted.
18) There has been a windfall advantage of a historic low in the prices of international crude, but the benefits of this are not been passed on to the consumer.

19) The Government talks about Make in India but the driver of manufacturing in India which is the SME sector not receiving lending.

20)   Under MGNREGA, instead of a 100 days only an average 39.98 days of employment is been made available to workers, despite severe rural distress

A greater cause for concern is that since it came to power the Modi Government has systematically neglected and weakened the social sector schemes which had been put in place by previous Governments. These schemes and programmes were aimed at helping the poorest in India.

A few may recall the current PM’s fondness, in 2013, of asking whether the rupee will fall to a point where it exceeds the former PM Dr. Manmohan Singh’s age. In an ironic twist of fate, the rupee has, on his watch, fallen past the ages of the current PM and the FM. At the rate at which it is going, it won’t be surprising if it crosses the ages of the veterans he has retired to the BJP’s margdarshak mandal.

The Modi Government continues on its campaign of ‘India Shining’ while the rural population suffers. It’s high time a the Modi Government does a course correction.

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