Launch long-term measures

It is difficult to judge who is correct when it comes to the performance of the Indian economy - the ruling party or the Opposition.

The Finance Minister, Nirmala Sitharaman announced the other day that though there is a slowdown, recession was far away. She is fully confident that the economy would not lead to recession as several sectors are doing very strong.

But, there is for sure a slowdown which needs an explanation and proper interpretation for one to understand who is right in this situation.

As the Congress maintains we are staring at a deepening economic crisis which is India specific. Its argument in the Rajya Sabha was well presented by former Union Minister, Anand Sharma.

As he averred if one looks at the primary engines of the economy like investments, public and private; factory output; the credit off-take to the industry and the exports of the country, we find that all these have slowed down or even shutting down.

The GDP too has fallen to 5 per cent, the lowest in the last seven years. Investment rate in the country has come down from 36.4 per cent (seven years ago) to below 30 per cent. One could only understand that public investment and the private investment have gone down very sharply.

Statistics show that the index of industrial production of the factory output is minus 4.3, the biggest fall since the year 2012. The contraction of manufacturing in India is 3.9 per cent, which has led to factory closures, worker's layoffs and mounting job losses.

In the last few months alone, with the two critical sectors, the auto industry and the textiles industry, in crisis, we have lost close to 2.5 million jobs.

The unemployment rate in the country has gone up. Unemployment is at 8.5 per cent against the usual average of 3 per cent in the country in the past. Even in software industry and service sector heavy layoffs are taking place.

The capital goods formation of our country has touched seven year low again at minus 21 per cent. The passenger vehicle's production has declined by 24 per cent. The commercial vehicles have declined the production by 62 per cent.

The private sector does not have the money to invest and it is up to the government to look into the matter. Credit off-take to the commercial sector has also declined. What does all this mean?

It means that the private sector is not investing; factories are not producing; and, Government is not spending because there is no money. This leads to trust-deficit for the ruling party.

Defending the situation or crisis vehemently and with great alacrity is not going to help it much. The hastily introduced GST has wreaked havoc as far as the small and micro enterprises are concerned due to the compliance burden.

Sadly, we are more worried and concerned with our politics. Elections are the most important issue for us and not day to day governance.

The Centre needs to wake up to the situation fast and go in for serious long- lasting remedies and not quick fixes.