THE ECONOMIC STORY

Even as the government scored ideologically and, despite setbacks, continued to remain dominant nationally, the big challenge for it remained the economy.

As figures made public on Friday show, growth in 20192020 slipped to 4.2% — from 6.1% in the preceding year. For the third year in a row, growth decelerated. An official National Statistical Organisation report, released last year, showed that unemployed had increased in 2017-18 to a 45-year high. According to another report, which was leaked and subsequently not published, real consumption levels dipped between 2011-12 and 2017-18. All of this presented a grim picture.

Growth was slowing, unemployment was rising, demand was plummeting. In addition, the balance sheet crisis extended to non-banking financial companies.

The government decided to address this situation primarily through supply-side mechanisms.

The biggest measure announced was in September last year, when corporate taxes were reduced. The government also unveiled a ₹100 lakh crore infrastructure plan for the next five years. But these measures were not enough to instil confidence and questions about whether the Indian economic story would revive continued to be asked.