Rahul Gandhi announces a basic income scheme called the Nyuntam Aay Yojana, to give a dole of Rs 6000 per month to families earning less than Rs 12000 per month, if the UPA is voted to power. Says it will benefit 5 crore families

News Snippets

  • Reports say that BJP candidate from Begusarai, Giriraj Singh, has refused to contest. Senior leaders are trying to convince him
  • Goyal's departure from Jet raises the possibility of the airlines' revival with banks now expected to release funds for the cash-strapped entity
  • Time to pass on the baton, says Naresh Goyal as he quits Jet Airways
  • Naresh Goyal and his wife Anita quit Jet Airways board
  • Amit Shah to contest from Gandhinagar, the seat held by veteran L K Advani whose name does not figure in first list
  • PM Modi to contest from Varanasi again
  • BJP comes out with its first list of 184 candidates across 20 states
  • Nirav Modi termed as "flight risk',denied bail by UK court
  • Aseemanand and three others acquitted in Samjhauta Express blast case
  • BJP wins floor test in Goa. 20 MLAs vote for the Pramod Sawant government while 15 vote against it
  • Mukesh and Nita Ambani help Anil to clear Ericsson dues. Anil thanks them publicly.
  • Anil Ambani escapes jail by clearing his dues to Ericsson within the time set by the Supreme Court
  • BJP's Pramod Sawant to be next chief minister of Goa. The party brings allies MGP and GFP in line by offering them posts of deputies to the CM
  • Despite overnight meeting, BJP yet to come up with a replacement for the departed Manohar Parrikar as Goa CM
  • Mid-air collision of two international flights luckily averted over Mumbai skies
economy
Is The Economic Slowdown Intensifying?

By Sunil Garodia

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.

The Indian economy is slowing down. Latest figures for the October-December quarter released by the Central Statistics Office confirm this. GDP has grown at only 6.6 percent in the third quarter this year, forcing a revision of the full year estimates to just 7%. This means that the last quarter growth will be just 6.5%, the lowest in 7 quarters. Full year gross value added (GVA) will only be at 6.85% which means that for three consecutive years, India will have a sub-7% GVA growth.

The drastic fall in agriculture and fisheries, from 4.2% in July-September to 2.7% in the third quarter is a cause for worry. Given the acute farm distress, falling rates show that the distress will intensify. This also means that rural incomes are falling and consumption will go down. Couple this with the reported shortfall in the sowing of the rabi crop and there is no doubt that farmers will continue to bear the brunt for a longer than expected time. Consumption spending data from the hinterland shows a drastic fall in demand.

Manufacturing is not rosy either. GVA in this sector has gone down to 6.7%. It was 6.9% in the second quarter and a robust 12.4% in the first. The Index of Industrial Production (IIP) shows the growth at 2.7% and it is drastically down from the 8.7% achieved in the same quarter last year. Only gross fixed capital formation (GFCF) expanded by 10.6% against the 10.2% logged in the second quarter. Fresh and big investments from the government are also not expected as it is in the last leg of its term and has already gone beyond its fiscal deficit targets.

These figures, when juxtaposed with the slowdown in China and Europe, the upcoming general election in the country and the worsening relations between India and Pakistan, do not raise hopes of an early economic recovery. With inflation in check, it is now upon the RBI to give a push to investment by making a bigger rate cut than the token 0.25 percentage points it made the last time. But one feels that in the absence of a huge rise in demand for goods and services, any rate cut will not cut much ice with investors. Since demand is not going to rise in a hurry, we are in for a period of consolidation. Things will probably improve from the second quarter next year with a new government in place and buoyancy for the September to November festival season.

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