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Context:
India has experienced an economic slowdown to 5.7%
What is the issue?
- India needs to grow at least 7 to 8 per cent a year. However, for the last 6years it has not crossed that average.
- Several indices like private investment, index of industrial production are also disappointing.
- However, the present government cite “ technical issues” as the reason for economic slowdown
What are the major issues with present government policies?
- Inefficient addressing to the problem around the relationship between big capitals and the banking system
- Though inflation has been managed well, unemployment remains a big problem
- There is diminishing faith in the private sector. Indian capital is facing a deep crisis of credibility.
- There is a lack of economic diagnosis. Myopic view of the government while implementing major structural reforms is a major issue.
- Improper implementation of reforms like demonetization. What it might manage to achieve in the future, could have been achieved by other means and at far less cost to the poor.
- Economic pessimism is evident from the political support for demonetization. The confidence in government was a consequence of the rock-water bottom to which the economy has reached.
