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IMF's GDP Projections

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The International Monetary Fund (IMF) on Wednesday lowered its growth forecast for the Indian economy in 2020 by 4.5 per cent, a "historic low", citing economic slowdown due to the two-month-long COVID-19-induced lockdown.



The fund, however, also said that India is expected to bounce back in 2021 with a 6 per cent growth rate. In 2019, India's growth rate was 4.2 per cent. 

The CoVID'19 lead economic crisis is different from other economic crisis in history and needs a different strategy. To revive the economy and boost growth govt should attract global investments and also increase liquidity and monetize the poor so much. Govt is highly ensuring the supply side hitch through credit guarantee schemes but only if the consumer has money in their hands these businesses would perform. 

Govt should not worry about the fiscal deficit and inflation for about 6 months. Only through more public spending, money would reach the poor - Garib Kalyan Rojgar is a good example. And regarding inflation, even if govt through MPC, controls the interest rates and inflation it will not stop hiking inflation due to demand for essential and food products. We could see a hike in WPI in May due to food prices. Also, it adversely affects growth. 

Adding to it govt increased the excise duty for fuels that also increases the food prices. Govt should ensure balance among inflation control, growth and food prices.

FM says the economy is recovering as the agriculture sector is contributing much. The fertilizer sales, wheat procurement by govt are contributing to the recovery and gives hope for growth in April - June quarter. But Agri sector contributes only 16% of the GDP, so it will not give high growth numbers for the quarter. Encouraging free market for the Agri products also seems good in terms of that the farmers have the choice to sell their goods but considering fuel prices and challenges in logistics, I believe they will end up selling it in the nearest mandi itself. I'm highly worried that farmers should not go to a situation of depending on MSP. 

High-level decision making are not always successful during implementation. There are a million examples from Mudra scheme to CGS. Please do research, make decisions based on statistical data and regarding structural reforms please consider parliamentary scrutiny and discussions instead of arbitrary actions.

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