In two big days there were two big headlines . One was RBI transfers 1.76 lakh crore to Government and the second was , India’s GDP rate falls to 5% . While the first one was a perfect recipe for a disaster the second one is a signal of that . Why the Economy has suddenly got Derailed , means we once USED to be the Fastest growing economy and our PM made us believe his distant dream of attaining 5 Trillion Economy by 2024 . First let’s look at the Pathetic state of Economy and then I will work out the repurcussions of the 1st HEADLINE .

So as I said our growth rate is at 5% in the first Quarter of 2020 which is lowest in 6 years while eve the NOMINAL GDP is at 8% only which is lowest in 17 years (means last such low stoop was attained in 2003) . ICING on the Cake was some Economists like ARVIND SUBRAMANIAN claiming that it’s overestimated by 2.5% . It means even this is manipulated and real growth is at 2.5% only ; but this fact can’t be agreed 100% as many Economists don’t agree with it . In this low growth phase AGRICULTURE has grown just by 2% which grew at 5% last year and MANUFACTURING sector has only shown growth of 0.6% which was 12.1% last year .

In the Manufacturing sector specially in the AUTOMOBILE industry the condition is so Terrible that many CEOs are openly expressing that their Inventories are just getting filled and literally no one is there to purchase their products . What are the reasons which has led to this Turmoil of our Economy :

• DEMONETISATION : There is absolutely no doubt that it was one of the biggest BLUNDERS in the History of mankind . A new report has stated that Corporate investment fell by around 60% after this . When this incident took place almost everyone was considering it as a Masterstroke but if anyone would had observed he would have seen that NO ONE absolutely no intellectual Economist praised the move but called it a Disaster instead ; whether RAGHURAM RAJAN or MANMOHAN SINGH or AMARTYA SEN , called it a script of a economic recession . Manmohan Singh predicted that it will lead to a fall of 2% in GDP growth rate and just look how accurately he predicted it . EDUCATION , KNOWLEDGE and EXPERIENCE are something which are not sold in the market like the GODI MEDIA . Also the two main reasons of Demonetisation have turned out null and void : CASHLESS : Cash in the Economy is at an all time high FAKE CURRENCY : 12800 fake 500 notes are found this year from 9800 last year (121% increase)

• GOODS AND SERVICE TAX : This is a very good thing as not only it simplifies the tax process but also gives government complete information about the Taxpayer . But it was implemented in a very complex and haphazard way that it made it look like a Disaster . Even after 1-2 years items were being shuffled from this rate to that rate , abolishing this rate and merging the others as if it’s a Joke . It affected small and medium businesses very badly . Also, a change always brings some slowdown as it did in many other countries also which implemented it ; so despite knowing this bringing DEMONETISATION almost 6 month before it made it look a lot worse than what it actually was in my opinion .

• BUDGET 2019 : The Historic budet which came in a traditional red cover showing Indian roots actually sent our economy to root level as well . Investors , stock markets didn’t liked it even a single bit and it adversely affected the system . Even Foreign investors pulled out 22.5 billion out from our economy .
• UNEMPLOYMENT : It is at a 45 year record high at above 6% . People don’t have jobs , those who have don’t see their salary rising . Growth in wage in rural sector is mere 1.1% in 2019 as compared to 14.6% in 2014 .
• DADAGIRI : It’s said that Government and central bank are two different fronts and should function independently even with a bit of conflict . But this government has tried to attain full power in almost everything and dominated central banks and other Economic advisors . During this government :

Governor of RBI RAGHURAM RAJAN (July 2016) , VC of NITI AAYOG ARVIND PANAGARIYA (August 2017) , Chief Economic advisor ARVIND SUBRAMANIAM (June 2018) , RBI governor URJIT PATE (Dec 2018) , Members of NATIONAL STATISTICAL COMMISSION (NSC) (January 2019) , RBI Deputy governor VIRAL ACHARYA (June 2019) all have RESIGNED .

If that many knowledgeable economists will resign getting Fed up by the attitude of the government then such a Turmoil of the Economy is not a surprise . Now the Economy and country is being run by those who are Bootlickers and Yes Sir gimmicks of this government . The best example is our current RBI governor .

• MISMANAGEMENT : Not just in institutios but also in enterprises Government tried to exert dominance . SAMBIT PATRA was brought in the Board if ONGC . What qualification did he had ? One if the most profitable comapnies suffered a loss of 400 crore in gas production . 54000 and 100000 jobs are to be lost in BSNL and PARLE G respectively . HINDUSTAN AEURONATICS LIMITED (HAL) is in one of it’s Worst ever shape , it had to borrow 1000 crore to pay out Salaries . Here aso government was lying that it has given many contracts to HAL and it is in perfect shape .
• BANK FRAUDS : According to RBI there has been a 74% rise in bank frauds causing loss worth 71000 crore . These news were being tried to be kept hidden . Between 2014 and 2017 government wrote off Loans worth 2.4 lakh crore from public sector banks , means that much money was blown into Air . Also if any of you remember RAGHURAM RAJAN gave a list of 17 NON PERFORMING ASSETS (NPAs) which were all big companies aand asked the government to take action . Government neither took any step nor disclosed the name citing SECURITY issues ….. NONSENSE . So much money if being blown into air then these things are bound to happen .
• GLOBAL TENSIONS : Last but not the least this factor has also played little but some role in it . US-China trade war , increasing rate of FED rates and other unfavourable factors for India have affected us in some or the other way . The government and it’s Paid media is trying to shift the whole blame in it only . But , then China shouldn’t have grown at 6.2% in the same Quarter which it did . Also keep in mind that China is a 12.5 Trillion Economy so even if it adds 6% it will add too much , even US is 18 Trillion+ Economy so even if it adds 3% it’s quite decent a growth . The more developed a country us more difficult it is for them to grow ad maintain the growth rate . On the other hand India is only around 3 trillion economy and adding 5% will not add anything considerable .

Now looking upon the reasons what can be the solutions . As a solution Merger of public sector banks was announced leaving only 4 public sector banks in India from 17 . Many may call it a Masterstroke but that’s not the case . Just think if we merge two loss making banks , it’s like tying up two sinking boats , only the loss can be a bit lessened but no gain can be reaped . Even if one profit and one loss making banks are merged it will just bring Neutral returns (Profit and Loss cancelling each other) . But in no way it will bring any BOOST or much needed incentive to our Economy . Also many other reform measures were announced by our Finance Minister NIRMALA SITHARAMAN and RBI Governor SHAKTIKANT DAS regarding policies on increasing investment in India and also increasing Repo Rate to increase money in public hands . But no one seems a solution to the problem we are facing which is very Crunch ; we are not willing to spend or invest much ….. there is FEAR .

As another solution of this problem Government took 1.7 trillion from RBI’s Vault . Out of which 70% is RBI’s annual dividend surplus that is regularly transferred to Government . Rest 30% is RBI’s Contingency fund which is kept for Emergency . According to our last two RBI Governors RAGHURAM RAJAN (RR) and URJIT PATEL ; this represents the Credibility of a country in testing times when they perhaps need to borrow from abroad . They thought that whatever reserve we have should be maintained and government should not put their hands into it . This MODI Government had an eye on this from very long right from RR’s time . He didn’t allowed for it ; even , URJIT PATEL who was a supporter of Modi initially and even supported Demonetisation move was so much against this that he resigned . Even RBI deputy governor VIRAL ACHARYA who resigned recently was outraged on this move .

When Nirmala Sitharaman was asked how she is aiming to use this her reply was “That I will not be able to tell now” – Have you gone out of your mind AUNTY , then why the hell have you took this money and brought our Economy into so much risk . Stock Market and Rupee both fell drastically after this decision . Another notable point here is when government is continuously claiming that Demonetisation and GST have been successful or in their words a MASTERSTOKE then revenue and tax collection should have increased , then why they need to ask for more money from RBI . LIE …. LIE …. and only LIE has been consistent with this government . Government gave the claim that the money will serve much better purpose with us than in the RBI Vaults . Though I am sure it won’t happen but remember that VENEZUELA also thought the same and captured it’s central bank’s vault and that brought a never ending crisis from which it’s suffering even today .

All I would say is that currently our Economy is being led by ECONOMICALLY ILLITERATES . Whether our finance minister , RBI Governor and even prime minister have no damn clue of Economics and how to take us out from this Recession . For we to come out of it will take high level shuffling of the system which is not going to happen in near future . Economic Recession is a very dangerous thing and it will not ask whether you are a Modi supporter or Anti-Modi when it will Hit you equally hard . So it’s my request that if not for country at least for your own sake OPEN your goddamn Eyes . Well even if you don’t what can I do ?

So just chant BHARAT MATA KI JAI , wait for RAM MANDIR which is on it’s way and hope that it saves our Economy .

JAI HIND

ARUNESH SINHA