In 2016-17, India was tagged as the fastest growing economy(among the major economies) in the world which meant that India was on track with the economic situation and it was happy and sorted with the government’s financial approach. But what the government did not talk about during its days of India being the largest economy was what India was projecting was a jobless growth. There was no to very little employment generation in the country.
Even then the economists had warned that GDP is merely showing the growth in the country and not the jobless factor that is attached to it. India’s economy heavily depends on the middle-class population who are majorly engaged in salaried jobs and small entrepreneurship. With no job creation and no vacancies at the place, the number of people seeking jobs increased significantly.
Hence when the GDP for the first quarter fell by -23.9%, it was not very shocking for economists who had already warned about this situation. It is not entirely on coronavirus that the economy fell apart but even before that, India was struggling to reduce ‘the debt to the GDP ratio’. The country has been heavily dependent on borrowed money from the International Monetary Fund, which eventually needs to be returned with an interest and India is in no position to do so. This not increases the ratio further, it also means that there is cash flow fro, the government’s side who has gone into the saving mode.
The center introduced concepts like ‘Make in India’ and ‘Atmanirbhar Bharat’ that don’t support the current state of the country. Make in India, for example, is a great initiative otherwise but with no growth in the Indian, these attempts to newer money generation ways are failing. Atmanirbhar Bharat, which means self-reliant, on the other hand, is the government’s way of saying that we have given you jobless growth, made you a hollow economy, and now you can take care of it yourself.
The GDP of India has been falling since the beginning of last year and when the coronavirus struck this year, the weak shoulders could not handle it. The Finance Minister of the country, Nirmala Sitharaman, has declared this to be an act of god but what about the economy before this? Who is answerable for that?
It was obvious that with this level of job creation opportunities available, people dependent on salaried professions were bound to suffer and so will the economy. What increased the impact of the fling economy, even more, was the people being laid-off during coronavirus. Be it government facilities like Railways and telecommunication company, BSNL or private sectors, all have suffered losses and hence resorted to laying off a lot of its employees.
“[Around] 21 million salaried job losses cannot be confined to only the support staff among salaried employees. The damage is likely to be deeper, among industrial workers and also white-collar workers,” the Centre For Monitoring India Economy (CMIE), a Mumbai based economic think-tank said.
This means that the economic crack will go deeper and it is not any time soon that the country will recover from this loss.
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