India is poised to become $5 trillion economy by 2024. This is Prime Minister Narendra Modi’s oft-repeated one-liner since he came back to power with an increased majority in Parliament. To this he added another humongous figure during the Independence Day speech: The government will invest a massive Rs. 100 lakh crore for developing modern infrastructure in the next five years. Both the targets end in 2024 when he will face another general election. But the ground reality is poles apart. India has slipped to seventh position in global GDP ranking from the fifth position it held a year back. According to the latest data, India’s economic growth has slowed down to around 6 per cent, the slowest pace since 2014-15, and experts see little hope of improvement this year too. But to reach in the club of $5 trillion economy, the country has to maintain a GDP growth in double digit, a near impossible task in the immediate future.
The ominous signs of slowdown are visible in many areas. The auto sector is facing its worst crisis in a couple of decades. Passenger vehicle sales have nosedived over 30 per cent in July, posting the ninth straight decline. Auto industry is just a tip of the ice-berg. Fast moving consumer goods industries have reported a decline in production. Real estate sector has huge inventory of unsold flats. India’s exports shrunk almost 10 per cent in June. Export figures in apparel industry could be an eye-opener. While China exports $145 billion, India’s figure stood at a mere $ 17 billion last year, even behind our tiny neighbour Bangladesh with $36 billion. Yet another example for the gathering clouds on the economic horizon is the continuous downfall of the rupee in relation to dollar. If a graph is made of various parameters of the economy, all of them will surely show a declining trend.
If one is still looking for more proof for the crisis in the economy, the skyrocketing unemployment across various sectors will make it abundantly clear. In automobile industry alone, reports suggest that 3.5 lakh people have been retrenched as many manufacturing plants have either shut down or cut production. Parle biscuit company alone is planning to cut 10,000 employees. These hard facts and harsh realities have prompted reputed economists and well-known industrialists to see red. In the words of former RBI Governor Raghuram Rajan, the situation is greatly ‘worrisome.’
The government may succeed in diverting people’s attention from the fast deteriorating economy and the crisis engulfing it by harping on trivial issues or needling religious sentiments. Many non-issues may be brought to the centerstage by pliable media. But it will be difficult to sidestep the economic issues for long. Indian economy remained stubborn even during the global melt down of 2007-08. When robust economies of the world collapsed, Indian economy withstood it. But the opposite is happening now. Anyone can build castles in the air. But what matters is building one on the ground. That needs a plan, strategy and means. Rhetoric from public platforms will not lead to revival of the economy.(Published on 26th August 2019, Volume XXXI, Issue 35)