The second wave is diminishing little by little so have we heard. Politicians will soon give themselves credit and publicize their work. Advertisements to show that they fought corona bravely. Sweets to distribute among naive people who will chow down on them.
Those who can still think, I mean anti-nationals, urban naxals, libtard type people who often raise the question.They are preparing for the third wave today. So that mistakes of second wave are not repeated.
Massive wave of economic crisis
At the same time, another massive wave is already here. However, a lot of people are ignorant about it. This wave will bring them to the streets. Disappointed, lost and helpless. Not due to the shortage of oxygen but for another reason…
I’m writing about a financial crisis that has been looming over the country for years. Due to corona it has become almost like a pandemic which has engulfed millions of Indians and its economy.
2017 and 2018 weren’t that great either, thanks to Demonetisation and GST. The situation was already getting out of control. Medically speaking, the economic system was showing symptoms of a disease.
Falling businesses, rising unemployment, rising country’s debt. Meaning, the level of the economy was close to 90. First wave of corona put it to the ventilator. Lakhs of people who were in the middle class are no longer in it. Whereas poverty doubled in size after the first wave.
New data shows that GDP has shrunk by 7.3% in FY21. It is the biggest shock to the economy in a long time. Mind you Nehru cannot be blamed for this.
In the years to come, it will be said that the economy is growing with so and so percentage. But when one has fallen so low any growth that follows will appear better than it really is. It’s called low base effect. That even a small rise from bottom will seem great.
Truth, when you compare GDP at constant prices, in absolute numbers.
In 2018, GDP was 140 lakh crores. In 2019-2020, it was 145 lakh crores. In 2020-2021, GDP has fallen to 135 lakh crores. All economic indicators show that it is behind by two years. In fact, worse than it was two years ago. And these are not just numbers, It is ground reality.
Not only cost of life, second wave also rendered 1 crore Indians jobless. 17% urban unemployment and 14% rural unemployment. 97% household incomes have declined amid pandemic. CMIE reports say so. 2-3% of people’s net worths have sky-rocketed.
The situation is such that those unemployed won’t find jobs very easily. Especially in the formal sector; they may have to wait for a year. Similarly, bringing the economy back on track will also take time. Covid still remains; things may change in the next few months.
The pandemic has hurt the economy the most.
In May, $8 billion was lost in GDP, weekly. Surprisingly, some other countries have fared better. Today, the average Indian is poorer than 2019. On the other hand, Bangladesh’s average income has surpassed that of India’s per capita GDP.
Bangladesh has done less talking, more working.
They focused on exports, social progress and fiscal prudence. In simple words, Bangladesh’s exports grew at 8.6% every year. Their women labour force has consistently grown. Men-women participating equally. In India and Pakistan, women participation has decreased.
Bangladesh has maintained a public debt-to-GDP ratio between 30% and 40% so that private sectors can borrow easily. India and Pakistan’s debt-to-GDP ratio, on the other hand, is close to 90%. This is unhealthy because debt slows down growth. Moving on, as the debt-to-GDP ratio is complicated.
Let’s understand in terms which are simpler to understand.
In Sri Ganganagar, petrol is costliest at 105 Rs a litre. It is close to the India-Pakistan border so prices are high due to distance and transportation costs. But, in Mumbai also, the price of petrol has crossed 100 Rs mark. Middle class will silently buy petrol at high tax without asking why.
But, this does not help mathematically. Yes, the same maths that politicians dislike. WPI or wholesale price index inflation has hit an all-time high of 10.5% in April. It’s a record-breaking stat. Mainly due to a rise in prices of petroleum products.
Even today India is a land of opportunities.
Although stuck in the web of false promises, it can still undo it. Remember those false dreams? That dollar will fall, rupee will rise? In 2014, 1 USD = 59 INR. Today, 1 USD = 73 INR. This shows that the power of our currency has declined over the years. The ongoing decade is make or break for India. The last decade we lost due to UPA’s policy paralysis and NDA’s wrong policies. 2010-2020 is called the lost decade of India.
Will the next 10 years be the healing decade for India?
For that we must take advantage of our demographic dividend. Only then can we progress. Because, from 2050 onwards, India’s population will get older. Now you will ask: What is the demographic dividend? It’s like a blank cheque. Let’s put a value and cash it.
Quick measures should be taken to revive the economy.
More focus on the economy and less on retrospective taxes. Save businesses from tax terrorism; new businesses should be encouraged. Only Adani and Ambani cannot make 5 trillion USD.
Thousands others will be needed. Our companies are known the world over. That’s why the stock market is closing on record highs. Similar companies will have to be set up. Quality companies must.
Savings have reduced due to the pandemic. Government will have to infuse money so that consumption increases. Nowadays, everyone is sitting on savings. Nobody is spending. Money will come from privatisation of shrinking, non-core PSUs. Not those PSUs which are profiting.
We will have to rediscover federalism.
One man/one office cannot run a large country like ours. States will have to have their power, money. We forget that India is a union. Less ego, less speeches, more work.
People who question are not traitors. Listen to them. Journalists entitled to protection against sedition, said the Supreme Court recently. And finally, adopt a progressive approach because boycott, ban, hate won’t take us to 5 trillion USD.