Professor of Economics, London School of Economics
The outlook certainly doesn’t look very bright. As far as GDP growth is concerned, it slowed to a four-year low of 6.7 per cent in 2017-18. In fact, excluding the past two years of the UPA-II government, the so-called period of policy paralysis, this is a 15-year low. The IMF in its World Economic Outlook (WEO) has downgraded India’s projected growth for 2018 from 7.7 per cent in its April 2017 report to 7.4 per cent in its July 2018 update. The talk of 8.2 per cent growth in the first quarter of the new financial year is misleading—as the economy recovers from the twin shocks of demonetisation and GST implementation, there are bound to be quarters where growth will appear high as the economy catches up with trend growth, from which it went on a downward swing in 2016-2017. Investment rates are down, exports are down, the rupee is in a free fall, and inflation is creeping up. Naturally, job creation has slowed down too—a recent CMIE report shows there was, in fact, a marginal decline in formal sector employment in FY 2017-18. Another recent report from the Centre for Sustainable Employment points out that there has been an absolute decline in employment after 2015, a trend that had started earlier.