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Is It Time For The Indian Economy To Undergo A 1991-Like Structural Reform?

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For the past financial quarter, various facts and figures have been making rounds that clearly imply that we are experiencing an economic slowdown. The term has also in the recent past, meant that the GDP has been recorded at its lowest rate – 5.8% in the first quarter. The union budget had promising claims to revamp the current scenario yet nothing concrete has been done with respect to major sectors like manufacturing and agriculture that contribute highly to the gross produce of the country.

It is extremely important to analyse whether this slowdown is temporary and we can bounce back or if it is the entire structure leading to a great decline and recession. Every economy goes through a cyclical slowdown which means there can be changes in the business cycle, a sudden emergence of demand and supply gap and varied monetary policies. However, sometimes the problems of the economy can go deeper, impeding the efficient and fair production of goods and services. In such a scenario, it will not be enough to introduce just fiscal reforms. Rather, these issues would require the government to undertake some structural policies.

A prominent illustration of this would be the reforms that were introduced to fix the crisis in 1991 under the leadership of PV Narasimha Rao which is popularly known as the LPG model of growth. The policy was fundamentally based on the New Economic Policy, that was designed by former Prime Minister Manmohan Singh. It stood for Liberalisation, Privatisation and Globalisation. Some steps like free trade policies, PSU disinvestment and encouraging foreign investment marked the genesis of a completely reshaped Indian economy that till date has managed to keep global repute.

So now the question is, does India need one such structural reform yet again? To answer this question, various parameters need to be scrutinised thoroughly to obtain a specific solution. The most important factors that drive an economy are investments, exports and savings. Each of these offers a foundation on which the growth factor stands. As per the Economic Survey of the Union Budget 2019, investment is the most crucial factor that facilitates demand, increases labour productivity, introduces new technology, and generates jobs, thereby catalysing a self-sustained virtuous cycle.

Now, the investment rate which is also called the GFCF (Gross Fixed Capital Formation) is defined as the acquisition of produced assets (including purchases of second-hand assets), including the production of such assets by producers for their own use, after subtracting disposals. This has shown a major decline from 34.3% in 2011 to 28.6% in 2018. In the same way, the gross domestic saving as a percentage of the GDP has dropped to a striking 29.3% in 2018 from 32.7% in 2011. Besides, the export percentage of the GDP has witnessed a fall from 24.5% to 19.6%. So, none of these important indicators of growth have performed adequately.

Apart from these, the Indian economy has been hit hard by the poor performance of the manufacturing sector. For instance, the auto industry is going through a major fall in sales and hence a loss of jobs. This has caused piling inventories and companies are forced to cut down production. The cutting down of production has furthered prevailing employment stress. This said to be the worst ever crisis in this industry in the past 20 years with almost 2.3 lakh jobs lost.

Also, the inflation rate in the economy has declined from 10.03% in FY13 to 3.41% in FY19. The low inflation rate would be a relief to consumers, but a prolonged period of falling prices is not good news for the economy. A constant fall in the inflation rate leads to over-production with highly reduced purchasing power and discourages new investments which in turn affects employment. This is an apt example of the major demand and supply gap that can significantly weaken the economy.

The next significant factor that indicates a poorly performing economy is the liquidity crisis prevailing in certain sectors. Liquidity basically can be defined as the ease of converting to cash, often considered the most liquid asset of all (cash is considered as the basic standard of liquidity as it can be converted to other assets quickly). Hence, decent economic growth is impossible without adequate liquidity.

Key Indian sectors are experiencing a period of acute consumption slowdown, followed by a period of extreme liquidity crunch after subsidiaries of Infrastructure Leasing and Financial Services Limited (IL & FS) struggled to pay back loans taken from banks in 2018. Here, a relation appears with the slowdown of the auto industry that India’s NBFCs (Non-Banking Financial Corporations) is one of the biggest factors that have contributed to the slowdown in the sector. A liquidity crisis negatively affected the companies that were plagued with lower sales.

For instance, according to the letter written by the SIAM to the Finance Ministry, 70% of two-wheeler sales and 60% of commercial vehicles sales are financed by the NBFCs. This, however, is expected to be a cyclical slowdown which should not be allowed to become more serious.

With all the points stated above, it is absolutely evident that the government needs to take some concrete corrective measures so that each of these issues is addressed properly. It is anticipated that the next two months will be crucial in managing the economy in a rich way. The main focus should be on boosting investment immediately. Further, as the festive season approaches, the government must monitor the demand patter strongly as it will be an opportunity. The factor of demand creation requires strong attention because production without adequate demand may further weaken the economy.

The overall situation is actually leading to a crisis which may not be able to combat the major economic recession the entire world is going to have in 2020. Strong land reforms along with major structural changes in the economy are the essential need of the hour. It is true that the situation isn’t as bad as 1991, but it is definitely not better than what it was in 2009.

Featured image for representative purpose only.
Featured image source: Rafael Matsunaga/Wikimedia Commons.
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An ambassador and trained facilitator under Eco Femme (a social enterprise working towards menstrual health in south India), Sanjina is also an active member of the MHM Collective- India and Menstrual Health Alliance- India. She has conducted Menstrual Health sessions in multiple government schools adopted by Rotary District 3240 as part of their WinS project in rural Bengal. She has also delivered training of trainers on SRHR, gender, sexuality and Menstruation for Tomorrow’s Foundation, Vikramshila Education Resource Society, Nirdhan trust and Micro Finance, Tollygunj Women In Need, Paint It Red in Kolkata.

Now as an MH Fellow with YKA, she’s expanding her impressive scope of work further by launching a campaign to facilitate the process of ensuring better menstrual health and SRH services for women residing in correctional homes in West Bengal. The campaign will entail an independent study to take stalk of the present conditions of MHM in correctional homes across the state and use its findings to build public support and political will to take the necessary action.

Saurabh has been associated with YKA as a user and has consistently been writing on the issue MHM and its intersectionality with other issues in the society. Now as an MHM Fellow with YKA, he’s launched the Right to Period campaign, which aims to ensure proper execution of MHM guidelines in Delhi’s schools.

The long-term aim of the campaign is to develop an open culture where menstruation is not treated as a taboo. The campaign also seeks to hold the schools accountable for their responsibilities as an important component in the implementation of MHM policies by making adequate sanitation infrastructure and knowledge of MHM available in school premises.

Read more about his campaign.

Harshita is a psychologist and works to support people with mental health issues, particularly adolescents who are survivors of violence. Associated with the Azadi Foundation in UP, Harshita became an MHM Fellow with YKA, with the aim of promoting better menstrual health.

Her campaign #MeriMarzi aims to promote menstrual health and wellness, hygiene and facilities for female sex workers in UP. She says, “Knowledge about natural body processes is a very basic human right. And for individuals whose occupation is providing sexual services, it becomes even more important.”

Meri Marzi aims to ensure sensitised, non-discriminatory health workers for the needs of female sex workers in the Suraksha Clinics under the UPSACS (Uttar Pradesh State AIDS Control Society) program by creating more dialogues and garnering public support for the cause of sex workers’ menstrual rights. The campaign will also ensure interventions with sex workers to clear misconceptions around overall hygiene management to ensure that results flow both ways.

Read more about her campaign.

MH Fellow Sabna comes with significant experience working with a range of development issues. A co-founder of Project Sakhi Saheli, which aims to combat period poverty and break menstrual taboos, Sabna has, in the past, worked on the issue of menstruation in urban slums of Delhi with women and adolescent girls. She and her team also released MenstraBook, with menstrastories and organised Menstra Tlk in the Delhi School of Social Work to create more conversations on menstruation.

With YKA MHM Fellow Vineet, Sabna launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society. As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

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A student from Delhi School of Social work, Vineet is a part of Project Sakhi Saheli, an initiative by the students of Delhi school of Social Work to create awareness on Menstrual Health and combat Period Poverty. Along with MHM Action Fellow Sabna, Vineet launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society.

As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Find out more about the campaign here.

A native of Bhagalpur district – Bihar, Shalini Jha believes in equal rights for all genders and wants to work for a gender-equal and just society. In the past she’s had a year-long association as a community leader with Haiyya: Organise for Action’s Health Over Stigma campaign. She’s pursuing a Master’s in Literature with Ambedkar University, Delhi and as an MHM Fellow with YKA, recently launched ‘Project अल्हड़ (Alharh)’.

She says, “Bihar is ranked the lowest in India’s SDG Index 2019 for India. Hygienic and comfortable menstruation is a basic human right and sustainable development cannot be ensured if menstruators are deprived of their basic rights.” Project अल्हड़ (Alharh) aims to create a robust sensitised community in Bhagalpur to collectively spread awareness, break the taboo, debunk myths and initiate fearless conversations around menstruation. The campaign aims to reach at least 6000 adolescent girls from government and private schools in Baghalpur district in 2020.

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A psychologist and co-founder of a mental health NGO called Customize Cognition, Ritika forayed into the space of menstrual health and hygiene, sexual and reproductive healthcare and rights and gender equality as an MHM Fellow with YKA. She says, “The experience of working on MHM/SRHR and gender equality has been an enriching and eye-opening experience. I have learned what’s beneath the surface of the issue, be it awareness, lack of resources or disregard for trans men, who also menstruate.”

The Transmen-ses campaign aims to tackle the issue of silence and disregard for trans men’s menstruation needs, by mobilising gender sensitive health professionals and gender neutral restrooms in Lucknow.

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A Computer Science engineer by education, Nitisha started her career in the corporate sector, before realising she wanted to work in the development and social justice space. Since then, she has worked with Teach For India and Care India and is from the founding batch of Indian School of Development Management (ISDM), a one of its kind organisation creating leaders for the development sector through its experiential learning post graduate program.

As a Youth Ki Awaaz Menstrual Health Fellow, Nitisha has started Let’s Talk Period, a campaign to mobilise young people to switch to sustainable period products. She says, “80 lakh women in Delhi use non-biodegradable sanitary products, generate 3000 tonnes of menstrual waste, that takes 500-800 years to decompose; which in turn contributes to the health issues of all menstruators, increased burden of waste management on the city and harmful living environment for all citizens.

Let’s Talk Period aims to change this by

Find out more about her campaign here.

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A former Assistant Secretary with the Ministry of Women and Child Development in West Bengal for three months, Lakshmi Bhavya has been championing the cause of menstrual hygiene in her district. By associating herself with the Lalana Campaign, a holistic menstrual hygiene awareness campaign which is conducted by the Anahat NGO, Lakshmi has been slowly breaking taboos when it comes to periods and menstrual hygiene.

A Gender Rights Activist working with the tribal and marginalized communities in india, Srilekha is a PhD scholar working on understanding body and sexuality among tribal girls, to fill the gaps in research around indigenous women and their stories. Srilekha has worked extensively at the grassroots level with community based organisations, through several advocacy initiatives around Gender, Mental Health, Menstrual Hygiene and Sexual and Reproductive Health Rights (SRHR) for the indigenous in Jharkhand, over the last 6 years.

Srilekha has also contributed to sustainable livelihood projects and legal aid programs for survivors of sex trafficking. She has been conducting research based programs on maternal health, mental health, gender based violence, sex and sexuality. Her interest lies in conducting workshops for young people on life skills, feminism, gender and sexuality, trauma, resilience and interpersonal relationships.

A Guwahati-based college student pursuing her Masters in Tata Institute of Social Sciences, Bidisha started the #BleedwithDignity campaign on the technology platform, demanding that the Government of Assam install
biodegradable sanitary pad vending machines in all government schools across the state. Her petition on has already gathered support from over 90000 people and continues to grow.

Bidisha was selected in’s flagship program ‘She Creates Change’ having run successful online advocacy
campaigns, which were widely recognised. Through the #BleedwithDignity campaign; she organised and celebrated World Menstrual Hygiene Day, 2019 in Guwahati, Assam by hosting a wall mural by collaborating with local organisations. The initiative was widely covered by national and local media, and the mural was later inaugurated by the event’s chief guest Commissioner of Guwahati Municipal Corporation (GMC) Debeswar Malakar, IAS.

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