Economy Continues to Flounder, Quarterly GDP Growth Just 4.7%
It comes as no surprise but the latest quarterly estimates of GDP growth for the third quarter of financial year 2019-20 has virtually stagnated at a mere 4.7%. These estimates were released on February 28, by the ministry of statistics and programme implementation.
As can be seen in chart below, quarterly GDP growth has steadily declined for the past seven quarters starting Q4 of 2017-18 (not shown in chart). The growth rate has nearly halved in this period indicating the severe stress India’s economy is in. The latest estimate for Q3 of 2019-20 shows an insignificant uptick from 4.5% in the previous quarter to 4.7%.
Coming as this does in the background of Prime Minister Narendra Modi’s grand plans of making India a $5 trillion economy by 2024, and the marketing of India as an economic superpower this anaemic growth is a harsh reality check for the government and its propagandists.
Of particular note is that growth rate of gross value added or GVA in agriculture, the biggest employer in the country, has risen only marginally from 2.1% in the previous quarter to 3.7% in the third quarter, as per the latest release. [See chart below]
This is despite the fact that rural unemployment, according to Centre for Monitoring Indian Economy (CMIE) estimates is projected at about 6% in January 2020, lower than urban employment, indicating that agriculture is absorbing an ever growing share of the unemployed without much addition to the output. This means that the same income is being shared among a larger number of workers in agriculture – a dire situation, if any.
In the other major sector of manufacturing, growth is even more abysmal, pegged at a measly 0.9% in Q3, compared with a negative growth of 1% in the preceding quarter. This shows the deep, almost recessionary conditions in industry. Already for the past several months there have been reports of job losses in several major industrial sectors, including automobile, textiles, gems & jewellery, telecom, IT, etc. The slowdown is further confirmed by the fact that share of Gross Fixed Capital Formation (GFCF) in GDP, a measure of investment in fixed assets, has shrunk to 30.2% from 31.9% in the previous year.
All this also shows the complete failure of the Modi government to manage the economy, and also the utter failure of its policies like cutting corporate taxes, selling off the public sector, inviting foreign capital in various sectors and severe cuts in government spending, especially on welfare schemes for the people. This package of neoliberal dogmas, already discredited throughout the world, continues to be rammed down the throat of people in India – with devastating consequences.
Focus on Social Polarisation
Meanwhile, the Bharatiya Janata Party-led government has been concentrating on pushing a Hindutva agenda for all these months with top leaders of the ruling party spending most of their time and energy in crafting strategies for majoritarian dominance and marginalisation of minorities, especially Muslims. This Rashtriya Swayamsevak Sangh (RSS)-inspired agenda has caused immense additional suffering in the country, as most recently seen in the horrifying communal violence that erupted in the capital city of Delhi, taking a toll of 42 persons as of date. The Delhi violence was a direct consequence of the incendiary and naked communal propaganda, including poisonous speeches during the election campaign for Delhi’s Assembly elections held earlier this month.
Since December, the country has been roiled by protests and clashes over the discriminatory citizenship law brought in by the government, and its proposal to build a national register of citizens (NRC) which seeks impossible documentation and is feared to be a move against Muslims.
The focus on such strategies, while allowing the loot of the country by corporates, both foreign and domestic, and kowtowing to US interests, as shown in the recent Donald Trump mega event, show in stark light the destructive path towards which the present government is dragging the country and its people.
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