India needs an urgent ‘Economic Reform’ | GDP Decline | Unemployment in India

India is currently going through one of its worst phases as the its experiencing the second COVID-19 wave which is nearly 3.5 times the previous wave. The number of COVID-19 new cases is nearly 3.5 lakhs from the last 15 days. Even the death number on an average is around 3500 deaths from the last 15 days.

Looking at this numbers, one might get afraid of the present situation and a common man anywhere in the country might feel unsecure and might get the anxiety or mental disorder. It is also noted that in the previous COVID-19 there were many mental issues too. Even the many people got disturbed due to lockdown and lack of jobs.

Even if we consider that we are going to win this battle in the next 3 to 4 months then it might be lie. Before few months we verbally declared that we won the battle of COVID-19 but we were factually incorrect. The main reason behind this is that we are having the resources and studies but we are suppose to look at the positive site in order to get rid of the seriousness of the current issues.

Neither the Central government nor the State government is able to take the responsibility of the death and cases. The both the government is blaming each other for the crisis and they are clueless as we can see their health infrastructure collapsed completely. Even their is failure of both the state as well as center. And they are supposed to understand that yes “We Failed”. If they are not able to say this then we might get the same number in the future.

Even if we won the battle, then we will be left with the Unemployment, Declining GDP, De-industrialisation and many more crisis. The main reason behind this is that we are not worrying about the economy of the country, even our government officials don’t want to hear the painful and suffering of a unemployed guy who is searching for jobs in India. The government is having many policies but none of them is working.

GDP Decline

If we look at the GDP of this country which got its power from the foreigners after 800 years in the 1947. Then the GDP of this country was similar or better than many countries like Singapore, China, Japan and many more. Even we were in the good scenario but we lost the battle and we are in such a miserable condition where we have the 70% youths but without job.

Have a look at this you will come to know about the seriousness of the situation even if the GDP growth for the FY-2021-2022 will be 10% then also it is not good. Now you will see that it might be highest in the world but it is not good. Now lets understand this by simple arithmetic:

Lets say that the GDP for the FY-2019-2020 was 100. Now in the FY 2020-2021, the GDP growth rate was -8%. Now since it is minus then you are suppose to subtract it from the previous year GDP.

Hence GDP for FY-2020-2021 = 100-8 = 92 . Now this is GDP of FY 2020-2021. Now lets assume that there is 10% growth in 2021-2022 that is the running year. Now 10% on 92 = (10/100)*92= 9.2 Now since this is positive we are suppose to add this to previous year that is FY 2020-2021. Therefore, GDP For this year would be 92+9.2= 101.2

Now just compare this with the 2019-2020 which was normal and if we compare with that then we will come to know that there was just 1.2% growth from the 2019-2020. Hence a GDP growth of 1.2% is not good for the country which wants a 5 trillion dollar economy. We hope that you will understand this. Hence 10% growth rate is nothing but just 1.2% growth rate. The latter doesn’t sounds good but unfortunately this is truth we must accept this.

Click here to know about the GDP growth rate of India from 1961 to 2019.

From the above link you can check the GDP growth rate from the world bank. Now from above data you will come to know that there is consistent GDP decline for India in recent few years it started from the 2016, and it is constantly declining. One of them factor is demonetisation which was introduced into the country. Followed by the GST which was good but the implementation was not good from the Central Government.

Unemployment in India

Whenever there would be less manufacturing then it is clear indication that you are moving towards de-industrialization which means that in their upcoming year you are going to loose jobs and people might loose their jobs. It is very much clear that if we are suppose to look at the data provided by the CMIE, it shows that around 74 lakhs people might loose their jobs in the April only.

It must be noted that nearly the same lockdown was imposed in the entire country due to the 2nd COVID-19 wave. But since we know that business are running but for a very short period of time. Even they are not able to pay the expenses from the revenue they are generating. Hence there is decrement in the recruiting capacity of businesses. The reality of the business is such that they are decreasing the labour as well as working capacity of the staffs.

We knew that India is a country which doesn’t have its own industry as it is totally depended on the China, America for hardware. Even the China is able to do 100 Billion Dollar business from India. The main reason of the Unemployment is the lack of Industrialisation. Lets take an example that if we were having the any electronics industry or any phone manufacturing industry or laptop manufacturing then our youths might get opportunity to learn and earn.

But since we are not but the whole world is depending on the China for manufacturing due its policies which is very beneficial to the industries. Even every company’s first choice is China not India. Either the policies we are adopting or the laws we are having didn’t suite to the multinational companies. Even after China, Vietnam is the next choice for the multinational companies.

In the last year when we thought that many European and American companies wanted to shift their production unit from the China to other parts of the world due to COVID-19 breakout. At that time, India too was considered as a place where production unit might set up. But it got a tough competition from the Vietnam and Thailand. And even these two became the 1st and 2nd choice for many industries. India again lost this opportunity.

There are very much less risk aptitude among Indians as many of them wants to move to have 9 to 5 job where he remain secured with a fixed salary. Even we know that there is very much less efforts from the government side to increase the employment. Read more about this is Goodmorningmumbai article. Here we explained what we lack in current education system and what we are suppose to have!

While in media, there is increment in media or mainstream media where we didn’t get news but we get a agenda as the owners of the media houses either have direct or indirect relationship with the political parties. The situation is alarming. In our current, policy makers are neither competent nor they understand the problem. Our Industrial production is declining from 2019 which means we are moving towards de industrialisation.

This will create a serious conditions in the front of the government. We need to stabalise this by taking appropriate steps. The policy makers should be changed or either we need to reconsider the policies. The economic reforms which was brought by the PV Narsimha Rao was great.

In 1991 when he too the government then there was just 1.1% GDP growth rate as the Soviet Union model of economy collapsed as well as the Union Soviet too. There was chaos in the country and we were going through tough times. But then we get liberalisation of economy and certain economic reforms which was implemented by Narsimaharao makes the condition better and when he left the PMO office in 1996 then India’s GDP growth rate was nearly 8%.

India's GDP growth from 1991-1996
India’s GDP growth from 1991-1996

This blueprint was done by Subramanian Swamy and implemented by Manmohan Singh. This reform was extended by the NDA and UPA in their era. But now we need to have one more reform in order to curb this situations. We need to have a new economic blueprint in order to bring India back to its glory. We are suppose to have this now or the situation might get more worse.

The current government needs to work on this as this is a powerful government in terms of numbers. They had created history by removing 370/35A article. We hope that this government would consider this situation and a solution soon would be adapted.

Ankit D

Ankit D is the editor-in-chief of Good Morning Mumbai. He is also the founder of the Good Morning Mumbai. He has a very deep insight about the politics of the country.

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