Slowdown only structural or cyclical factors, India’s growth potential not lost. Decoding the nature of India’s economic?
The economic slowdown had already started in the year 2014-15 in India. In the decade 2010 – 2020, unemployment has increased due to slowdown. People have also lost their jobs because of less demand of products/services respect to the companies. It was caused by structural deformation which has taken place on account of several bad decisions and other factors as well. Reduction in GDP, unemployment and less demand in the market prove easily that recent years have been suffering from this slowdown.
Either root cause was not encountered properly by govt or failed to reform it. The steps that have been taken to reform the dead economy, that made economy more vulnerable like GST, Demonetization & Corporate tax cut were about to boost economy whereas these steps fell to achieve. The finance ministry of India has failed to overcome the financial crisis of India in every applied decision to the economy in order to save it.
In the beginning, this slowdown was considered a temporary problem. Therefore, proposed solutions have not been affecting the slowdown, that was supposed to be affected.
Any countries economy runs on its basic structure and its status of the economy up to this basic structure: how it is built, how they are connected to each other etc. As much as it is strong, that much stability it possesses. The tax system is called the backbone of the economy. It should be simple, leakage less and fair to all class. That old tax system we had was confusing and complex. So, GST is introduced instead of the old ones. As a result, the market fluctuated a lot.
It is not necessary that decisions won’t have long term benefits too. Looking at previous reforms one thing can be said that it has certain benefits as far as upcoming years concern.
GST is also a tax reform that will make taxation go to the system, but meanwhile, it also disturbing the current economy. By writing against govt is not a blaming. In fact, govt is also concerned about the economy and might be, those decisions may have long term benefits. But for now, the economy does not seem to take a boost. With proper planning, some plans or policies should be implemented to increase the demand in the market. To run the economy as smooth, the basic structure of the economy has to be made enough strong. And, this might take some time.
“Demand problem, supply is enough.”
All decisions have been taken to reform the economy is simply based on how to increase supply to the people and spending money in the market to reduce cost and so on. There is no demand in the market and by cutting rates, it has not increased either. So, the government needs to put effort into demand and how to put money in people’s pocket direct or indirect.