Hope 2020 offers better GDP growth
We have entered a new year today. That year is 2020.
We have entered a new year today. That year is 2020. As a numerical, the New Year appears appealing and alluring. But when we review the year gone by i.e. 2019 from economy perspective, our Indian economy did badly.
Last calendar year kicked off on sombre note with gross domestic product (GDP) registering a disappointing 5.8 per cent in January-March period. It was the first time in recent years that India's economy registered a growth rate below six per cent.
The growth fell further down to five per cent in the following three month from April, hitting a six-year low. But the downward spiral did not stop there with GDP clocking 4.5 per cent during July-September. Macroeconomic indicators point at much slower growth during October-December.
No surprise if GDP growth falls below four per cent. That way, 2019 was a big disappointment for India from an economic perspective. Interestingly, Prime Minister Narendra Modi and his BJP retained power at the Centre with an increased tally of 303 Lok Sabha MPs despite the economy hitting the slow lane. That's an interesting anomaly.
With 2019 dishing out disappointing economic numbers, there is optimism in the air that the New Year 2020 will bring in an accelerated growth and with it, cheers to our rulers and the ruled alike.
Industry body Confederation of Indian Industry (CII) painted a rosy picture about Indian economy's performance in the New Year. It cited proactive measures announced by the Modi government, RBI and easing of global trade tensions as reasons for its optimistic view of the economy.
It mentioned about the green shoots in the economy in the form of improved PMI (Purchasing Managers' Index) of manufacturing and services, uptick in passenger air traffic, slight decline in the fall of automobile sales, etc.
However, it suggested to the central government to adopt a flexible fiscal policy with an objective of achieving fiscal deficit in the range of around 0.5 to 0.75 per cent, which, it said, will have a multiplier effect.
But the fall in consumption demand in rural areas is a worrisome factor and the Centre has to initiate measures to revive demand there. The faster revival in rural economy is essential because majority of Indians live there.
The expeditious release of funds to farmers under PM-KISAN scheme will benefit the rural economy. Under this scheme, the Modi government pays up to Rs 6,000 per year to each of small and marginal farmers as minimum income support.
Sectorally, automobiles and realty sectors will also play key role in the country's growth trajectory. As the Centre announced several measures for real estate, things will look up in this key segment.
It's a watershed year for auto sector as Bharat Stage VI emission norms will kick in from April. The move will benefit the sector. Therefore, 2020 is likely to turn out positive for many key sectors.
The Hans India wishes you all a Happier New Year 2020. Grow well, let others grow well and let happiness and prosperity prevail as we enter into the new decade that begins this year. Let's hope for higher and better economic growth in India and around the world in 2020.