Essay on economic crisis

Essay on economic crisis

Our government told us that the economic slowdown in India was due to the economic slowdown worldwide But the IMF (the International Monetary Fund) has said that 80% of the reason for the world economic slowdown is the economic slowdown happening in India.

So this proves that the pathetic condition of the economy and unemployment in our country today is due to the internal reasons of our country It is due to the mistakes of our government.

It is due to the failures of the Modi government The IMF has also stated that India's projected growth rate for the year 2019 has been lowered down to a mere 4.8% Do you know what this means? 

The dream which our Prime Minister showed us of a 5 trillion dollar economy is the one we were supposed to achieve by 2024 With this growth rate, India will not be able to reach that 5 trillion dollar economy goal even by 2030.

So the biggest question that arises here is how the Indian economy be revived? How can we achieve economic growth again? 

Economist Abhijeet Banerjee who was recently awarded a Nobel Prize in the field of economics He believes that the biggest problem in the economic crisis today is that of demand in the economy Demand has fallen drastically That is, a common man in the country does not have money to buy anything So the demand for everything in the market has fallen In his opinion, 

the solution for this is to give money in the hands of the common and poor man This can be done by increasing the minimum support price of the crops This can be done by the National Rural Employment Guarantee Scheme 

There should be a direct transfer of cash in the hands of the poor people In his opinion, the government should focus on demand and leave aside worries of fiscal deficit and inflation rate 

You might already know the meaning of inflation rate- the inflation that is happening Fiscal deficit means how much money the government is earning and how much money it is spending The ratio of it is called the fiscal deficit whatever debt is incurred by the government 

Abhijeet Banerjee also believes that the biggest priority of the government should be a focus on human development that is spending more in the fields of education and healthcare in order to develop our labour force 

He says that the Indian labour force in comparison with that of China, Bangladesh and Vietnam is ranked quite below and is of much lower quality and the reason behind this is that we do not focus as much on education and health care due to which the labour quality is quite substandard in our country 

Next, we will see the suggestions of the economist Ajay Chibber He is a visiting scholar at George Washington University He has obtained his PhD from Stanford University 

In his opinion, the ongoing trade wars between USA and China This was a huge opportunity for the rest of the countries of the world to improve their economic growth Because a lot of companies of the USA manufacture in China, the goods are made in China 

So China basically exports manufacturing due to the trade wars, these companies had to look for another country for manufacturing (their goods) so the other countries could take up this job and take advantage of it 

But India lost this opportunity due to lack of competitiveness and the rest of the countries like Bangladesh and Vietnam took advantage of this opportunity and invited other companies and got them to invest in their country to shift the manufacturing There was a jump of 30% in the US exports of Vietnam after the trade wars began And Bangladesh too, took great advantage of this opportunity due to which the economic growth of Bangladesh is at 8% 

According to Ajay ji if we have to recover the Indian economy, we need to recover the investments In his opinion, we need to liberalize the agricultural markets and exports According to him, in order to boost rural demand, we would need to spend more money on PM Kisan and MNREGA 

He says that there is a need for a huge push in the tourism sector A scheme like "Swaagat India" could be launched which could double the tourists coming to India in the next ten years He is in favour of privatization 

In his opinion, Air India, Bharat Petroleum, Shipping Corporation of India and the Cement Corporation of India should be privatized and disinvestment should be done For the rest, he says that the government should focus on 8-10 industries and should give priority support to those industries, For example, the auto industry and the pharma industry.

Decentralization:

Out of all the suggestions of all the economists that I have analyzed, the most detailed and the most specific suggestions have been given by our former RBI Governor, Raghuram Rajan

In his opinion, the biggest problem of the government is its centralized approach For every decision, the PMO needs to be approached All the decisions stem from there and nobody else has the authority to take a huge decision due to which the government is highly inefficient The PMO is approached on all matters 

His first suggestion is that the government should quit looking for political motives in everything If any economist criticizes the government or gives them a suggestion, 

then the government shouldn't try and (cast aspersions on him by saying) he must be paid by Congress He is doing this because he must have some ulterior motive The government should learn to accept suggestions 

Decentralization is a very critical thing that the government should do It should empower its ministers to take their own ministers and it should appoint competent ministers 

Secondly, he says that the government should clearly know what it wants regarding GST There shouldn't be attempts to change the rates of GST every few months Because if we want to attract investments to our country then, for that, the tax and regulatory policies need to remain consistent 

If changes are made every few months, then this causes inconveniences for the businessmen and it becomes very unpredictable (to understand) for what items the GST rates would be increased or decreased in the future 

We do not know hence we will not invest in this country Next he says that the government should focus on the telecom sector and maintain its competitiveness in it 

It should not so happen that the telecom sector is reduced into a monopoly or duopoly where only one company rules, for example, reliance Jio or there are only two companies that are the only options for the consumers either Reliance Jio or Airtel 

The government should focus on maintaining competition so that other companies can also thrive and the other options remain available to the consumers Because if competition is consistent in this sector then that would ensure consistent growth 

In his opinion, the process of land acquisition should be made easier and more transparent so that the other companies get motivated to invest Labor reforms is another important suggestion of his He maintains that there should be flexibility in labour contracts.

Today, what happens is that most of the industrial companies hiring people have two options: one of them is making the workers permanent after one year or the workers get hired on a short term contractual basis

Short term contracts are the ones in which people get hired and are later fired Since most of the companies prefer to have a short term contract with the workers, 

What this leads to is the companies not investing a lot make their workers skilled to augment their skills and improve them because the companies know that this is a short term contract and then they (the workers) would get fired The other effect of is that the workers themselves do not get the safety of job security 

In his opinion, the government should bring in an intermediate contract in which the workers need not be made permanent but more rights are given to the workers 

so that they need not be hired on a short term contract basis By doing this, the Indian labour force would be more flexible the workers would get more training and their skill development will be enhanced Furthermore, just like Abhijeet Banerjee, Raghuram Rajan says that the government needs to focus on sectors like education and health care 

There is a need to increase government regulations (in fields like) environment, quality of education food and healthcare If these are increased then the labour force in India would automatically become more developed And the human capital would develop 

Due to this, the companies would want to come and invest when they find skilled workers here Raghuram Rajan ji also accepts that the consumer demand is very low but according to him, the government should not further cut taxes as a solution 

He says that if the government cuts taxes for the common man, then the people would start saving more instead of spending that money And if this happens, there would be no boost in the economy The more money is spent, the more economic growth there is.

Consumption

Rajeev Dubey ji is the editor of the Business Today newspaper In his opinion,  there are only three ways to revive the Indian economy Consumption, Consumption and Consumption 

In his opinion, the Indian economy can be revived only by increasing Consumption The specific suggestions that he has given includes that the GST should be made simple Fuel and alcohol should be brought under GST Insolvency and Bankruptcy Code, Real estate Regulation Act need to be made simpler Foreign Direct Investment needs to be made simpler and easier 

In his opinion, India's slow judiciary is also a huge problem The government should focus on how soon the pending cases can be dealt with and make the Indian judiciary system Further, 

He says that the ease of business should be improved in the entire country Ease of business ranking is calculated by only focusing on Delhi and Mumbai Hence it is improving in Mumbai and Delhi but is not improving in the rest of the country as fast.

Our ex-Prime Minister Manmohan Singh Ji has chalked out a five-point plan to revive the Indian economy Although he has not listed out the specific points the five points that he has put forward is similar to what the rest of the economists have been saying 

For example, he said that GST should be rationalized and improved Demand should be revived. Consumer demand and consumption should be increased Labour intensive sectors should be fixed. 

Now how that should be achieved is not detailed by him He has not spelt it out specifically Further, he says that we should attract private investment And we should look for opportunities in the places where India can increase its exports Like I said, this plan is not quite specific.

But generally, the same thing has been said as to what the rest of the economists have said.

Tax Reduction 

Yatish Rajwat ji is a business and policy analyst He writes for the Economic Times In his opinion too, Improving consumption should be the first priority of the government How can this be done? 

He says that taxes should be further reduced in the lowest slab of the income tax, due to which more money would come into the hands of the people and they would be able to spend more Raghuram Rajan Ji had suggested the opposite of this He says this that doing this would not boost consumption 

But it is a common fact that different economists disagree with the effects of doing different things This is not a huge deal but the core idea of the economists remain that we should increase consumption For the rest, 

In his opinion, GST filing should be made quarterly for the companies whose turnover is equal to or less than 10 crores This would reduce a little pressure on the companies In the auto sector, the employees should be skilled for electric vehicles and the auto sector should be pushed in order to enable them to adopt electric vehicles.

Conclusion:

So these were a few suggestions of the renowned experts of the country it is for us to see how many suggestions the government decides to accept and implement and how many people in the government would still call these criticizers anti-nationals and Congressi paid.

Because if this continues to happen then the economic situation of the country is not going to improve The reality of today is... India's rank in the corruption index today has fallen two places below India's rank in the democracy index has fallen ten places below India's rank in the global competitiveness index, too, has fallen ten places below So, 

Economically, the situation is terrible The economy of Bangladesh is growing at 8% For India, the prediction is not even 5% and even now, the government remains embroiled in useless issues.

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