The Big Slowdown

Numbers suggest that the Indian economy hasn’t been doing very well recently, and experts say that the numbers point to a trend of concern — a net aggregate decline in employee strength of the biggest companies!

- Manav Seth

The Indian economy has posted an impressive growth in the last few years, even when most major economies have been struggling to stay away from recession. In this context, anything below 6 percent growth is at a risk of being termed a ‘slowdown’; however, a 5.7 percent growth rate, coupled with scattered data on job losses, dipping private investment, unhealthy public sector banks and two major policy disruptions in a span of few months might give even the most optimistic economic expert jitters. Let us look at a few aspects of this debate, and understand how these numbers impact our world.

The slowdown and job slump

India’s GDP grew 5.7 percent during the April to June quarter, the slowest in almost four years, and has been declining continually for the last six quarters. All major institutions, national and global, have lowered India’s growth for the future as well, and the RBI has trimmed it liberally from 7.3 percent two months ago to 6.7 percent recently. Even the IMF lowered it to the same value from its earlier projection of 7.2 percent. On the same lines, the World Bank also adjusted it from 7.2 percent to 7 percent. An Indian Express report says that thousands of jobs in the textile, IT, and banking sector have been hit and quotes examples of L&T (14,000 jobs cut), HDFC Bank (6,000 job cuts) and Suzlon Energy Ltd (1500 job cuts) to substantiate the claim of lack of jobs in the market. Furthermore, the report stated that a total of 212 start-ups had wound up operations in 2016, nearly 50 percent higher than the preceding year.