The most recent deceleration in growth is the result of the inability of the system to sustain the artificial stimuli that the neoliberal policy environment facilitated. It is a problem that does not lend itself to easy resolution.
SEPTEMBER did not begin well for the Narendra Modi government. As it prepared for a makeover in the form of a Cabinet reshuffle with Elections 2019 in sight, news came that India’s GDP (gross domestic product) growth had slowed significantly to 5.7 per cent during the April-June quarter. This deceleration comes in the wake of a fall in growth rates from close to 8 per cent a year earlier to 6.1 per cent during the January-March period this year.
As expected, the government chose to attribute this trend to shortterm shocks, which will not dislodge the economy from a 7-8 per cent growth trajectory that is considered to be the magical norm under the National Democratic Alliance (NDA). T.C.A. Anant, the Chief Statistician of India, whose real job is to oversee the preparation of the figures and not to explain them, declared at his press conference that the April to June deceleration was not the consequence of the botched demonetisation, but of pre-GST (Goods and Services Tax) apprehensions that had resulted in de-stocking. Wanting to clear their stocks before the new rules and rates applied, manufacturers chose to dispose of their stocks and not add to them with new production, was his claim. Since he had similarly declared when reporting the January to March deceleration that the trend cannot be attributed to demonetisation, the Chief Statistician was at least being consistent. The fact remains that a continuous deceleration in growth from 7.9 per cent in the first quarter of financial year 2016-17 to a threeyear low of 5.7 per cent in the first quarter of this financial year cannot be dismissed as being the result of unwarranted short-term fears of some economic agents. What the figures do point to is a loss of dynamism in the principal commodity-producing sectors in the economy—agriculture and manufacturing.
Bu hikaye FRONTLINE dergisinin September 29, 2017 sayısından alınmıştır.
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