India’s GDP growth rate has been tumbling down since FY17 — 8.26%, 7.04%, 6.12% and 4.18% in FY20, going by World Bank data. It began as a tremor and ended with everyone quaking. From the first half of FY19, people began noticing a slowdown, when the growth rate began falling every quarter – from 7.95% (Q1FY19) to the lowest in 11 years at 4.1% (Q4FY20). Just when we thought it couldn’t get worse, the pandemic lockdown began.
Over the next two quarters, we faced the full impact of the virus lockdown and GDP shrank. The economy stopped growing, even at its earlier slow pace, and began contracting. Today, the consolation is that our speed of decline is slowing. It is a bit like telling the Godzilla-overrun town that the monster is retreating. Of course, there will still be crushing and throwing about of people, but you know, in lesser numbers.
To protect the economy from further rampage, the government has announced schemes to encourage manufacturing and drawn out a large Budget for infrastructure development. The RBI had earlier cut repo rates generously, by 2.1% over six cuts, since February 2019 to make cheap credit available. The pump-priming impressed the IMF enough to revise its 2021(FY22) growth estimates for the country to 11.5%. The billion-dollar question: Will that be achieved?
You don’t want to be left behind. Do you?
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