Slowdown, not a big concern, but its only a disruption

By Bapuu Naraayannkar

Yes, there is an economic slowdown, but it is not of concern, but only a disruption, as this was expected, when the country was on a threshold of an impending slowdown due to ILFS and DHFL crisis, sometime back.

Why it is disruptive? Because, there is adequate liquidity in the system, hence there is a good scope for a quick revival. The crunch is only being felt heavily at the retail level.
The current five per cent, which is the lowest quarterly GDP growth rate in six years, is no indication of India slipping into a recession as claimed by Congress.

It only refers to contraction of Indian economy in consecutive quarters, which has affected the lending process of banks and other financial institutions, but the economy has not stop growing, only the rate has slowed down.

This is, of course, a setback for India as it mandates accelerated growth to bring the economy back on track.

However, many economists and big bulls like Rakesh Jhunjhunwala are optimistic of the Indian economy making a turnaround in third quarter of this fiscal, especially after major announcements made by Narendra Modi government a few days back.

One such announcement was infusion of Rs 70,000 crore into the banking system to start the process of lending and boost consumer sentiment. Another important decision was releasing of all the pending GST refunds in next 30 days and ensuring MSMEs getting refunded within 60 days in future.

The merger of ten banks into four with adequate capital and expertise was also a vital decision as it paves the way for consolidating the banks and gives the scope to possibly privatize and divest from them, which would help India get to a higher potential growth rate i next couple of years.

Apart from these announcements made by Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal also took vital steps to woo foreign investors. He allowed FDI in various sectors including single-brand retailing and mining, giving clear indication of the government's concern to revive the economy.

Additionally, the decision to give a part of its surplus reserves is shot in the arm for the government, which will give them the opportunity to put this money to good use.

Also, implementation of National Register of Citizens (NRC) by the government will boost economic growth in states, where illegal migrants are almost running a black market economies, by routing their earnings to their countries of origin by illegal means.

Moreover, government's plans to allow 100 per cent FDI in insurance from the current 49 per cent, will also help this $280 billion sector grow further.

Moreover, bringing 99.3 per cent of domestic companies having turnover of Rs 400 crore under 25 per cent tax bracket will make them deliver services and products to their clients in a cost-effective manner.

This is very vital because these firms provide enormous job opportunities and contribute to Indian economy.

Also government's efforts to relax scrutiny of investors in angel tax and reduction in shareholding voting rights from 50 per cent to 25 per cent, should attract more investors in Indian tech startups and help them transform into global unicorns, which will boost Indian economy.


With all such measures taken and fresh announcements expected from Sitharaman's office in next few days, one can only be optimistic that she would take steps, which would bring the India economy back on track in a short time.