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.

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