In this financial year, after the continued decline in several sectors in the recent quarters, the World Bank has also estimated the growth rate of the Indian economy below 6 percent. India’s growth rate in 2018-19 was 6.9%.
However, the World Bank has stated in a recent edition of the South Asia Economic Focus that India will achieve 6.9% growth by 2021 and is projected to grow to 7.2% in 2022.
The World Bank has released this report when the annual meeting of the International Monetary Fund is about to take place. India’s growth rate remained sluggish for the second consecutive year.
The growth rate in 2018-19 was 6.9% and before that in 2017-18, it was 7.2%. There was a 6.9% increase in industrial output growth during this period. There was a growth rate of 2.9% in agriculture and 7.5% in service sector.
In the first quarter of 2019-20, both the service sector and industry fell. The decline was due to a decrease in demand. The current account deficit in the World Bank report has also come down to 2.1% of the GDP of 2018-19.
Earlier it was 1.8 percent. This clearly proves that India’s trade deficit is increasing. That is, India’s import bill is increasing and exports are decreasing.
According to the World Bank report, there has been a decrease in investment as compared to this year with 2018. At the end of the last financial year, the foreign exchange reserves were $ 411 billion. However, during the same period, between March and October 2018, the rupee had lost 12 per cent against the dollar.
According to the World Bank, there is a decrease in poverty in India, but its pace has slowed down compared to earlier. In 2011-12 and 2015-16, the rate of poverty reduction was 21.6 to 13.4%.
This report says that the decline in the rate of poverty reduction was due to GST and demonetization. Along with this, the slowdown in the economy in rural India and increasing unemployment among the youth also affected slowed down.
The World Bank has said that it was only after the fall in the first quarter that signs of lethargy were found. According to this report, there will be a decrease in demand due to decrease in income in rural India and this will affect the rate of growth.
The World Bank report says, “Exports are not expected to increase much. Due to the ongoing trade war between China and the United States and slowdown in global growth, foreign demand will also be less. “
Former RBI Governor Raghuram Rajan also said on Friday that India is in danger as Asia’s third largest economy. He said that the revenue deficit is more than what is being shown.
Speaking at the OP Jindal Lecture at Bron University, USA, Raghuram Rajan said that the Modi government does not have an economic outlook. He said that the economy of India which was at 9% in the first quarter of 2016 has reached five today.
India’s growth rate reached five percent in the April-June quarter, which is the lowest level in the last 6 years.
Before the World Bank, Moody’s reduced India’s growth rate from 6.2 percent to 5.8 percent. Raghuram Rajan says that the Modi government’s decision of demonetisation has proved fatal and GST was also not implemented properly.
Earlier last week, India had lagged behind in the Global Competitive Index. Last year India was at number 58 but now it has reached number 68.
Singapore tops the index. After that there are countries like USA and Japan. Most African countries are at the bottom of this index.
The reason for India’s ranking falling is being said to outperform other countries. In this index, China is 40 places above India at number 28, there is no change in its ranking.
GST has badly impacted on organized sectors. From the last two and a half years since GST has been implemented, more than 1400 changes have been made. This has led to a lot of confusion among the people of organized sector.
About 1.2 crore people have registered for GST, but only 70 lakh people file GST and only 20 percent of the annual returns are filed.
The government’s tax collection has come down due to slowdown in the economy. Last year, the GST decreased by 80 thousand crores and the direct tax also decreased.
Even during these worst situations for the future of India, the Ruling party ministers are making baseless statements like measuring the country’s economy by the revenue collection of the movies.
As a matter of fact, the government is totally confused about what to say and what to do and do not have any reasonable and logical answers to explain this mess, thus giving such excuses out of frustration where they are everyday loosing the control over the country’s growth and development.