
Manmohan Singh on the economy: “India cannot afford to continue down this path.” - firasd
https://medium.com/@firasd/manmohan-singh-on-the-economy-india-cannot-afford-to-continue-down-this-path-full-text-c956a0f4dc69
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kk58
Firstly Gst is a huge problem that's impeding growth. Consumption slowdown is
because GST maybe pricing out non essential purchase for average household.
For egs Hotels are priced at 28% gst if am correct. That's a huge drain on
local tourism consumption.

Second private investment is at all time low due to infrastructure and credit
challenges

Third global slowdown has hit our export markets a little bit

Lastly no big government projects over the last couple of years except welfare
schemes that don't really help improve business conditions quickly

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dragonsh
Actually the trade war should have helped India immensely, but like always
they squandered on this opportunity as well. The current administration is
just drinking its own Kool-Aid.

Everything is alright according to them India was miserable for last 70 years,
they turned it around, converted it to most powerful and economically
developed nation.

Current economy is great with shining India.

Unless administration does not accept mismanagement of economy and stop
diverting public attention by creating issues of national security, things
won't change.

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firasd
Lately the pro-Modi govt response to economic criticism from people from the
previous UPA government -- besides claims about corruption -- has been to
point out higher inflation in the previous era. Here, the former Prime
Minister says:

> Rural India is in terrible shape. Our farmers are not receiving adequate
> prices and rural incomes have declined. The low inflation rate that the Modi
> government likes to showcase comes at the cost of our farmers and their
> income, by inflicting misery on over 50 percent of India’s population.

This question -- should inflation be higher to improve rural income -- is a
bit beyond my economic knowledge but an interesting counter-argument. Maybe
people with a better understanding can weigh in.

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gingabriska
Well inflation has to be at some healthy level.

Low inflation means there isn't much money in market chasing goods and
services. It can happen if there is simply no demand for goods/services. So
you don't see price for goods/services going up.

High inflation means too much money chasing limited goods, leading to price of
goods and services soar.

Both are bad for the economy.

In a country like India, government expenditure drives economy. If government
hoards all cash and sits atop it, sucking market dry - it's bad for economy
but you can claim lower inflation only for sometime before the supply also
adjusts to the current demand, shrinking the economy and then cycle continues,
you end up with slower growth rate or growth reversed.

Look at growth rate, what do you see?

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firasd
Thanks for the info. Yeah growth is definitely slowing down, quarter after
quarter.

