Economic Slowdown in India
For not even more, than a year, we could celebrate the feat of 5th largest economy in the world, we have come down to 7th largest economy
Last year, our economic size stood at $2.65 Trillion where the UK stood at 2.64, and France 2.59
But now the maths has changed and the UK has reached a figure of $2.82 Trillion where France is at 2.78 and India stood on 7th rank with $2.73 Trillion economy size
What does it mean?
It means that our economy in dollar terms has grown by 3.01% compared to last year when we grew by 15.72%
Why the hell this is happening?
One major reason — Fall of Rupee
With the growing Trade war between China and the US, the tension in Iranian peninsula, ILFS crisis and more, has badly affected the value of Indian Rupee in the global market
Is it an economic slowdown?
Past few months haven’t been the best for Indian economic. With one after the other, major economic fucks up have been happening, which directly impacted our growth
What are those economic push-backs?
- Infrastructure Leasing & Financial Services (ILFS) Crisis
ILFS is an NBFC (Non-Banking Finance Company) which provides loan to various sectors including infrastructure, agriculture and etc. Since last few years ILFS hasn’t been doing in getting their loans repaid. At the beginning of 2019, ILFS has declared a debt of whopping 1 Lakh Crore. They started declaring NPAs (Non-performing Assets) which eventually created a massive cash crunch in the market
2. Dewan Housing Finance Limited (DHFL) Shuts
Recently, DHFL has been declared bankrupt and the IBC has been initiated by them. With massive debt, the housing industry has shut their doors to DHFL
3. Growing NPAs (Non-Performing Assets)
NPAs have been a pain-in-the-ass to Indian economy since ages. With the growing NPAs (Loans that never come back to the bank) banks have reduced giving out more money as a loan, eventually creating a cash crunch in the market and some banks go bankrupt
4. Fall in the automobile industry
The automobile industry has been performing its worst in the last 2 decades. With the given reasons of cash crunch to the consumer, high-interest rates, consumers waiting for electric cars, the whole industry has been hit hard
This doesn’t stop to lesser car sales. The roots are deeper
The auto industry has fired and still firing thousands of employees due to lack if the business in the market
5. Foreign Portfolio Investors (FPIs) pulling out their money
With the first budget of 2nd inning of BJP Govt, Finance Minister has slapped a whopping taxes on FPIs
Finance Minister slapped a whopping 5 crore on FPIs to invest in India. This doesn’t go well down to FPIs and they pulled out massive 20,000 crores from the Indian market
I repeat! 20,000 Crore from the Indian market
This created a massive cash crunch in the economy which eventually hurt the economy and brought us at 7th position in terms of economic size
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