FADING THE ECONOMIC STANCES

India has always been the one of the most fast moving economy from the time when the silk route was at its peak and after that long history, much happened which cannot be described here in just few words but if to sum up we can say it has always in loss when compared to its previous rate. The forwarding rate can be much higher then the other competitors but still the in the battle to self somewhere we are lacking.
From once being the Golden Sparrow to the economic reforms of 1991 and now the modern era from Demonetisation to the newest one GST every thing contains the impressions of a comman Indian man, a farmer who earns on daily basis with his hard labour. He has been lost and misunderstood from the centralised AC offices. Well this is not to criticize the Government as it is not only responsible, the concern here is that every stakeholder somewhere deflected from its path.
Four engines powers the economy: exports, government investments, private consumption, and private investments. The pain has begun to spread to the whole of the economy as growth in government investments and private consumption started slowing down in the starting year. The economy’s four growth engines are stalling or slacking.
GDP growth has lost momentum in each quarter since the one ending March 2016. With every passing quarter, the slowdown is explained away either as a transitory phenomenon or as happening for reasons beyond the government’s control: deficient rains, the sluggish world economy, or lately due to demonetisation and the goods and services tax (GST). The reasons offered change. The economic trend does not.
Government investments and private consumption depend on how well the economy is doing. As incomes improve, private spending and tax collections pick up. Let’s look at exports and investments. The global economic downturn that followed the 2008 financial crisis dealt a body blow to exports, before which exports were growing smartly. Recovery in the global economy has lifted exports of most Asian countries, but Indian exports are stagnating, their competitiveness eroded by the overvalued rupee.
India’s economic future can improve significantly with investments-led growth. The share of investments, the principal growth engine in the economy, in the GDP has declined steadily for the past five years. The decline in private investments is so sharp that it has offset the increases in government investments. The steps taken for improving the ease of doing business and the foreign investments regime have proved insufficient in restarting the private investments cycle. As a result, new jobs are not getting created. Without new jobs, consumption will only grow up to a point.
Why are investments on hold? The returns-risk projections of projects are not favourable. Companies are not convinced that new factories will be sufficiently profitable. Among the variables that affect investment decisions are costs and availability of finance, land, labour, technology, logistics, and taxation. Market prices, or consumer prices inflation, is also a determinant of profitability. The government is politically sensitive. So, it has set a low target for consumer price inflation. For the same reason, it is unable to progress on land and labour reforms. The flow of credit in the economy has thinned to a trickle, as the government moved on bad bank loans belatedly and inefficaciously. Even if big companies can raise finance from alternative sources, the smaller ones cannot. Most of the other factors have escaped policy attention altogether. Additionally, in an environment of constant shocks and unanticipated policy changes, investment decisions tend to get postponed. If people feel unsettled, they are unlikely to invest.
Even after all such we are quite impressed with the various rankings such as Moody's, Standerd and Poor's, Fitch etc and various Indexs by which the Government get an opportunity to ask for political benefits but reallity is very much far away numbers or rank upgraded from other fellow Country doesn't account for the real prosperity of the people.
We have to rewind the whole economic history and have to discuss on each of the mistake that has been made either may be economic reforms or demonetisation only then we have the actual ratings but main aim should be recognise the real economics makers the comman man who earn to survive.

About Author: Shubham