Q2 GDP & beyond - what should we do next?
(The following article appeared in Business Standard on November 30, 2019, per the link below: https://www.business-standard.com/article/opinion/in-the-midst-of-a-consumption-slump-119113000027_1.html ) Q2 GDP & beyond - what should we do next? GDP data released for the second quarter of fiscal year 2019-20 (Q2 FY20) sadly reaffirms that India’s economy is in need of serious repair. Despite the government pushing its spending up by a strong 15.6% this quarter, our economy registered a very disappointing real growth of just 4.5%. Worryingly, investments recorded only 1.0% growth, and manufacturing shrank by 1.0%. At just 6.1%, the nominal growth was the lowest of this GDP series. India is in the midst of an investment and consumption slump. There is pressure on policy makers for further fiscal and monetary support to the economy. However, focusing primarily on these would be a mistake on several counts. To begin with, the true extent and quality of ...