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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News Network
March 14,2024

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The high-level committee on simultaneous elections, chaired by Ram Nath Kovind, on Thursday met President Droupadi Murmu at Rashtrapati Bhavan and submitted its report on 'One Nation, One Election'. The report comprises 18,626 pages.

Home Minister Amit Shah was also present at Rashtrapati Bhawan when Kovind led panel submitted the report.

"Simultaneous polls to Lok Sabha and state assemblies can be held in first step, followed by local body polls within 100 days in second step," reported PTI quoting the panel.

"Synchronised polls for all three tiers of government to improve governance architecture, in line with quest of aspirational India," it added.

The report has been submitted 191 days after the constitution of the panel on September 2, 2023.

It's further reported that the proposal also puts focus on having a singular electoral roll for holding Lok Sabha, state assembly and local body polls.

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News Network
March 17,2024

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New Delhi: The Election Commission on Sunday made public fresh data on electoral bonds, which it had submitted in sealed covers to the Supreme Court and was later asked to put it in public domain.

These details are believed to be pertaining to the period before April 12, 2019. Electoral bond details after this date was made public by the poll panel last week.

The BJP encashed electoral bonds totalling Rs 6,986.5 crore; maximum Rs 2,555 crore received in 2019-20, as per the EC data.

The Trinamool Congress received Rs 1,397 crore through electoral bonds, second largest recipient after BJP, as per the EC data.

On the other hand, the Congress redeemed a total of Rs 1,334.35 crore through electoral bonds.

DMK received Rs 656.5 crore through electoral bonds, including Rs 509 crore from lottery king Santiago Martin's Future Gaming.

BJD encashed electoral bonds worth Rs 944.5 crore, YSR Congress Rs 442.8 crore, TDP Rs 181.35 crore.

Political parties had filed data on electoral bonds in sealed cover as directed by the Supreme Court's interim order dated April 12, 2019, the poll panel said in a statement.

"Data so received from political parties was deposited in the Supreme Court without opening sealed covers. In pursuance of the Supreme Court's order dated March 15, 2024, the Registry of the Supreme Court has returned physical copies along with a digitized record of the same in a pen drive in sealed cover. The Election Commission of India has today uploaded the data received in the digitized form from the registry of the Supreme Court on electoral bonds on its website," EC said.

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News Network
March 13,2024

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An LPG tanker overturned on the Bengaluru-Mangaluru National Highway 75 on Wednesday morning. 

According to police, the tanker overturned at a curve near Double Turn, on Shiradi Ghat road, in Sakleshpur taluk, as the driver lost control.

As there was LPG leakage due to the mishap, the authorities have closed the highway for vehicular movement, as a precautionary measure.

The Fire and Emergency Services personnel and police were rushed to the spot and taken precautionary measure to prevent any fire mishap.

Several vehicles have been stranded midway as the police have closed the road for traffic.

The police have been diverting vehicles plying between Bengaluru-Hassan-Mangaluru, Mangaluru-Hassan-Bengaluru on alternative routes.

According to Deputy Commissioner C Sathyabhama, the vehicular movement has been banned on NH-75, until Wednesday midnight.

The DC's order stated that the vehicle moving from Sakleshpur to Mangaluru will have to pass through Sakleshpur-Hanubalu-Mudigere to reach Mangaluru.

The vehicles from Bengaluru to Mangaluru will pass via Hassan-Bhuvanahalli Cross-Belur. The vehicles from Mangaluru to Bengaluru are diverted via Suliya-Sampaje route. 

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