World’s 5th largest Economy is struggling badly with its continuously falling GDP growth rate. Every Indian citizen is worried about the ongoing Economic crises for a long time. India recorded a 4.3 per cent growth rate in the most recent September quarter which is lowest ever in the last 6 years. Let’s get into the vivid statistics of the economy to analyze the condition thoroughly. At present, India’s Gross domestic product (GDP’s) growth rate has fallen on a 6-year low, which is 4.5% (Second quarter of FY 2019-2020). Even, the International Monetary Fund also indicated a further slowdown in Indian Economy. India’s derailing economy consistently witness this slowdown since last many years – GDP growth rate for the financial year (FY) 2016-17 was 8.2%, for FY 2017-18 closed on 7.2%, FY 2018-19 got over at 6.8%, consecutively slowing further to 5% for Q1 & 4.5% in Q2.
This fear is growing more across the country after a recent breakdown of “Yes Bank” followed by “PMC Bank”. Though, the Government is assuring all its citizens that there is no financial crisis and the situation is under control but people are panic. Today, Indian shares a dream of PM Modi’s $5 trillion economy goal. Thus, it is mandatory to maintain a consistent growth rate of over 9% to achieve a $5 trillion economy goal. How rational is this Goal? Is this a possible dream? As we have seen how economic slowdown unfolds over a past few years and there’s no allusion of its recovery so far. If India can maintain a steady pace with a 9% growth rate, this would be the anecdotal situation – approx. $3.3 trillion GDP in Financial year (FY) 2021, $3.6 trillion GDP in FY 2022, $4.1 trillion GDP in FY 2023, $4.4 trillion in FY 2024 & lastly $5 trillion goal in FY 2025.
India has big dreams and desires to become the world’s 3rd largest Economy right after the U.S and China. And, it was the time to work steadily over its Goals but as fear spreads, the Indian Government had to announce a 21 days’ lockdown due to Novel Coronavirus (COVID – 19). It will harm already struggling Indian Economy and will further slow down its decreasing GDP growth rate. It will certainly be a great challenge to cope up with its negative effect and at the same time, there was no other alternative to limit the damage of Novel Coronavirus.
Significantly, a large number of financial report shows deep concern over this financial crisis. The fiscal deficit for the period April – October was recorded at 102.4% surpassed the annual target underlining the fiscal concerns for the government. The fiscal deficit from April – October stood at Rs 7.2 lakh crore vs Rs 6.48 lakh crore. The budgeted target was Rs 7.03 lakh crore. Recently, India’s finance minister Nirmala Sitharaman announced a few measures to tackle the situation where the government has slashed Corporate taxes, set up special Real- Estate fund, merged banks and announced the biggest privatization drive in more than a decade.
Needless to say, the Indian Government has to tackle the situation to fix the Economy as soon as possible before it is too late. Key investors and Big businesses are counting a heavy loss where ordinary citizens are losing their jobs. Unambiguously, this is the biggest challenge for the Modi Government.