India is on recession?
This is a billion $ question, though difficult to answer, which is being asked on daily basis, when someone meet another in a business meeting or a family get-together. There are countless social media messages, anecdotes and hear-says flying around shipping the assumptions about the present position of the economy and many of those are simply predicting that the economy is heading towards recession. Most of those messages are not authentic and cannot be relied upon fully. Some are putting the blame of that on stringent steps taken by the Government of India such a demonetisation, implementation of GST in hurried manner, heavy investment in infrastructure etc as reason for the so called downward trend. Many of the economist and corporate personalities are denying the ‘theory of economic recession’ and expressing high confidence in the steps taken by the government in recent past. Some corporate stalwarts such as N.R Narayana Murthy are exuding high level of conviction in the stability of Indian economy and projecting it as the strongest economy in past 300 years!.
Nevertheless the government is eying to reach an ambitious $5 Tn economy by 2024 with 8% growth rate in GDP, the spiralling unemployment rate, skyrocketing government debts, low consumption rate, low productivity, high profile corporate financial failures, struggling automobile sector, waning infrastructure sector, hassles and logjams in doing business and substantial outflow of foreign funds from stock markets, falling currency rates, news about ‘snatching’ of the reserve funds of RBI by government etc are remaining as worrisome facts and adding fuel to such assumptions. Though the opinions are varied and both sides have strong holds to justify their stand points, certain statistics released by government in recent past is pointing towards an intimidating query- Are we on recession?
Global trends- An influencing factor
The Government debt has risen substantially in emerging and developing economies and many of them are struggling to balance the same with their growth. The global economic trend is showing a weaker-than-expected growth in 2019 and the forecasts for 2020 are also not giving much signs of revival. The Emerging and Developing Economies are facing sluggish growth due to the weak investment and heightened risk factors such as trade barriers, financial stress and sharper than expected slowdown in the economies. The trade tensions between US and China had also contributed to the slowness in trade activities. The advanced economies are also facing a frailer than projected progress rate of 4% which is resulting in poor momentum in the investment activities. U.S. growth is forecaste