{"id":220323,"date":"2022-12-29T20:13:56","date_gmt":"2022-12-29T14:43:56","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=220323"},"modified":"2022-12-30T11:56:46","modified_gmt":"2022-12-30T06:26:46","slug":"raise-capital-formation-never-let-demand-down","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/raise-capital-formation-never-let-demand-down\/","title":{"rendered":"Raise capital formation: Never let demand down"},"content":{"rendered":"


\nSource<\/span><\/b>: The post is based on the article <\/span>\u201c<\/span><\/b>Raise capital formation: Never let demand down<\/span><\/b>\u201d <\/span><\/b>published in<\/span> the Live<\/strong><\/span>mint <\/span><\/b>on <\/span>29th December 2022<\/span><\/b>.<\/span>\u00a0<\/span><\/p>\n

Syllabus<\/span><\/b>: GS3- Indian economy and growth.<\/span><\/p>\n

Relevance<\/span><\/b>: Issues related to economic growth.<\/span><\/p>\n

News<\/span><\/b>: The article explains the reasons behind lower GDP growth in pre-pandemic years. It also explains the current economic scenario.<\/span>\u00a0<\/span><\/p>\n

What are the viewpoints of the current Chief Economic Advisor about the economy?<\/span><\/b>\u00a0<\/span><\/h5>\n

GST and demonetisation were not responsible for the pre-pandemic<\/span> economic slowdown<\/span><\/b>. It was financial sector stress that slowed <\/span>capital formation<\/span><\/b>.\u00a0<\/span>\u00a0<\/span><\/p>\n

Less credit in supply and demand lowered GDP growth. The double<\/strong><\/span>\u00a0balance sheet crisis<\/span><\/b> was responsible for this stress.<\/span>\u00a0<\/span><\/p>\n

Structural reforms<\/span><\/b> by the government will yield results. Economic policy or reforms will have an impact, provided everything else remains constant. When other things change, their short-term impacts overshadow reforms.<\/span>\u00a0<\/span><\/p>\n

Why was capital formation one of the major reasons for the pre-pandemic economic slowdown?<\/span><\/b>\u00a0<\/span><\/h5>\n

Capital formation<\/span><\/b> has been a weak link in India’s economy in recent decades. It was at its peak rate of 40% during the 2008-09 global recession. The annual rate of investment has fallen to a level of 10% lower. This has led to <\/span>slower output growth and weak job creation<\/span><\/b>.<\/span>\u00a0<\/span><\/p>\n

What is the economic situation now?<\/span><\/b>\u00a0<\/span><\/h5>\n

Bank stress<\/span><\/b> is easing now.\u00a0 NPA was at a peak of 11.6% in 2018. It has fallen to a level of 5%. <\/span>Today the capital looks adequate. <\/span>Credit growth<\/span><\/b> has reached its highest level in 10 years.<\/span>\u00a0<\/span><\/p>\n

The weak point is <\/span>lower consumption expenditure<\/span><\/b>. Demonetisation and <\/span>complexity of the GST regime<\/span><\/b> have impacted informal and small businesses. It has impacted the li<\/strong><\/span>velihoods<\/span><\/b> of the people.<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on the article \u201cRaise capital formation: Never let demand down\u201d published in the Livemint on 29th December 2022.\u00a0 Syllabus: GS3- Indian economy and growth. Relevance: Issues related to economic growth. News: The article explains the reasons behind lower GDP growth in pre-pandemic years. It also explains the current economic scenario.\u00a0… Continue reading Raise capital formation: Never let demand down<\/span><\/a><\/p>\n","protected":false},"author":10311,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[9],"tags":[],"class_list":["post-220323","post","type-post","status-publish","format-standard","hentry","category-public","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1702426203},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/220323","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10311"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=220323"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/220323\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=220323"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=220323"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=220323"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}