Indian economy not recovering, may contract 25% in current fiscal: Economist Arun Kumar

News Network
January 17, 2021

The Indian economy is not recovering as fast as the government claims and the country's economy may contract 25 per cent in the current financial year, noted economist Arun Kumar said on Sunday.

Kumar further said that due to a big decline in the GDP during the current financial year, the budget estimates have gone completely out of gear and, therefore, there is a need to correct the Budget.

"India's economic growth is not recovering as fast as the government is showing because the unorganised sector has not started recovering and some major components of the services sector have not recovered.

"My analysis shows that the rate of growth will be (-)25 per cent in the current financial year because during lockdown (during April-May), only essential production was taking place and even in agriculture, there was no growth," he told PTI in an interview.

The Reserve Bank of India (RBI) has projected the Indian economy to contract 7.5 per cent in the current financial year, while the National Statistical Office (NSO) estimates a contraction of 7.7 per cent.

Also, according to the NSO, the Indian economy contracted by 23.9 per cent during the April-June 2020 quarter and recovered faster than expected in the July-September 2020 quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5 per cent.

Kumar, a former professor of economics at JNU, said the government's own document that provided April-June and July-September quarters GDP (gross domestic product) figures said there will be a revision in the data later on.

He predicted that India's fiscal deficit will be higher than it was last year and the state's fiscal deficit will also be much higher.

"Disinvestment revenue will also be short. Tax and non-tax revenues will be short," Kumar said.

He said India's economic recovery will depend on several factors including how quickly vaccination can be done, how quickly people can go back to their work.

"We are not going back to the 2019 level of output in 2021. Maybe in 2022, after the vaccination is done, we will recover back to the 2019 level of output in 2022," Kumar said.

He added that the growth rate in the coming years will be good because of low base effect, but the output will be less than 2019.

Asked whether the government should relax the fiscal deficit target in the upcoming Budget, Kumar said, "It has been argued since July that the government should allow the fiscal deficit to rise and spend more and give money to the unorganised sector and in rural areas."

On India recently imposing fresh restrictions on foreign direct investment (FDI) from countries that share land border with India, he said, "It is a knee-jerk reaction". If you look at the past three-four years, all the start-ups had big investments from China, Kumar added.

Stressing that like China, India should also invest more on research and development, Kumar said, "We are now in a bad situation where we have to do knee-jerk reactions like raising tariffs, withdrawing from the RCEP (Regional Comprehensive Economic Partnership), and having new FDI rules, to stop investment from China."

He pointed out that when investments in India are lacking, restricting investments from outside is going to put us in further trouble.
 

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Agencies
March 1,2021

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Kochi, Mar 1: Former Kerala High Court Judge P N Ravindran on Sunday joined Bharatiya Janata Party (BJP) in presence of Union Finance Minister Nirmala Sitharaman in Kochi.

During the BJP state president K Surendran's 'Vijaya Yathra' at Thripunithura in Kochi, Sitharaman welcomed Ravindran into the party.

Earlier in the day, Sitharaman had lashed out at the Pinarayi Vijayan-led government in Kerala over the state budget and accused it of giving all the budget money to the Kerala infrastructure investment fund board (KIIFB).

The election for 140-member Kerala Assembly is scheduled to be held in a single phase on April 6.

A total of 2,67,88,268 electors will elect the candidates in Kerala for the 15th Legislative Assembly.

For Assembly poll 2021, the number of polling booths in Kerala has been extended from 21,498 to 40,771. The counting of votes will be held on May 2.

According to the commission, of the 140 Assembly seats, 14 seats are reserved for SC category and two are reserved for ST category candidates.

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News Network
February 25,2021

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Alappuzha, Feb 25: A young worker of RSS was hacked to death allegedly by members of Social Democratic Party of India (SDPI), the political wing of Popular Front of India, during a clash in Alappuzha district on Wednesday night.

Police identified the victim as Nandu alias Rahul Krishna, 22, the RSS shakha mukhya shikshak at Nagamkulangara in Wayalar village panchayat in Alappuzha. 

Three activists of the RSS and SDPI were seriously injured in the clash. A strong contingent police was deployed in the area to prevent escalation of violence.

According to the police, the SPDI held a meeting at Nagamkulangara two days ago as part of their state-wide protest and boycott campaign against Uttar Pradesh Chief Minister Yogi Adityanath, who was in Kasaragod last Sunday to flag off the BJP’s Vijay Yatra, a state-wide pre-poll political tour. The SDPI workers had raised slogans against the BJP.

On Wednesday, the SDPI conducted another political campaign march in the village. The RSS had objected to the anti Sangh Parivar speeches. Later in the night, both sides took out separate marches. 

The police said the RSS workers were attacked after the SDPI march, leading to clashes and death of one of the RSS workers.

The BJP called a dawn-to-dusk hartal in Alappuzha district on Thursday.

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Agencies
February 25,2021

Indian expats' plea for COVID-19 test exemption on arrival back home  gathers steam | Uae – Gulf News

Dubai, Feb 25: Indian expats in the UAE are seeking exemption from the self-paid Covid-19 tests for passengers on their arrival in India, saying it would be an added burden for those returning home after losing their jobs during the ongoing pandemic, according to a media report.

In a plea, the expats have urged the Indian government to fund the RT-PCR test on arrival in India and exemption for children below 12 years from getting tested twice- in the UAE and India. Various community groups and social workers have supported the plea, the Gulf News reported.

India has since February 23 made it mandatory for passengers to produce the negative report of the RT-PCR tests taken within 72 hours before their departure to India.

The passengers are also required to undergo self-paid confirmatory molecular test on arrival in India.

The on-arrival test cost would be an additional burden for several Indian families flying home, Ashraf Thamarassery, a prominent social worker and winner of India’s Pravasi Bharatiya Samman Award for NRIs, said.

“There are many people, who have lost jobs, flying back home. There are families with four or five members leaving the UAE. Also, how can people, who are leaving after staying without any documents and financial cases, pay this amount? Those who came on visit visa looking for jobs will also be affected,” Thamarassery was quoted as saying in the report.

He said the Indian government should urgently address the issue and help fund the tests.

He said that the people coming to the UAE are also tested on arrival but the government is bearing the cost of testing passengers of all nationalities.

K V Shamsudheen, who runs Sharjah-based Pravasi Bandhu Welafre Trust, said he has written a letter to Kerala Chief Minister Pinarayi Vijayan to stop the “self-paid” test on arrival.

Meanwhile, some expats are even delaying their journey to India hoping that the government would revise the rules, the news report said.

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