The India economy grew at its slowest pace in over six years in the September quarter with GDP growth rate at 4.5%. This shows that the economy is facing the worst economic slowdown as in the same quarter last year the growth rate stood at 7.1%.
From weak manufacturing, falling consumer demand, drop in exports, increase in the percentage of NPA’s to demonetization, lesser investments, fewer jobs and global slowdown- all the factors are responsible for such a slow growth rate. Although the government has taken various steps like RBI’s rate cute, deduction in corporate tax, reviving the telecom sector, disinvestment of PSU’s the measures have not yielded the expected results.
It’s imperative that the government shifts its priorities on reviving consumer demand and increasing investments while also boosting the exports to revive the economy. In the upcoming financial budget, the government should look at the possibilities of reducing the taxes which will boost consumer expenditure. The recent labor law reforms are a step in the right direction wherein the employment opportunities will be higher and should follow through. This is also the right time that the government lays emphasis on structural changes in the economy like skill development, boost to the manufacturing sector and revival of agricultural growth.
Despite the numbers, hopes to revive the economy has not been lost as the authorities should see the growth rate as a wake-up call to not only speed up reforms but also implement them in full capacity.