A Frontier Editorial | Vol. 50, No.25, Dec 24 – 30, 2017
Persons in power had been boasting about India’s high rate of growth in terms of the GDP. Now the fall in the rate of growth is being highlighted, while the official spokesmen are dishing out the hope, somewhat against hope that the rate of growth will soon pick up.
For one thing the impact of the global recession on the Indian economy was not negligible. The Indian economy was, however, not as much export-oriented as that of China. This was not due to the perspicacity of India’s policy makers but to popular struggles of varying forms and degrees, which prevented the ruling authorities from implementing full-scale globalisation. Recently, however, Narendra Modi’s demonetisation move has had a debilitating impact, particularly on the informal sector of the economy, besides causing immense harassment to the common money-using public. The fact that 99% of the demonetised cash returned to the baking system bears testimony to the fact that the so-called campaign against black money is a big failure, if not a big bluff. Demonetisation coupled with Goods and Services Tax (GST) has slowed down the rate of growth of the GDP; on this there can be no disagreement. The twin evils seem to have hastened the process of decline of the manufacturing sector that grew by just 1.2 percent in the first quarter in 2017-18, as compared to 5.3 percent in the preceding quarter in 2016-17.Read More »