Why Does Our Government Refuse To Acknowledge The Economic Slowdown?

Union Finance minister Nirmala Sitharaman

Nirmala Sitharaman, the current Finance Minister of India, blamed the change in the “mindset of Millenials” for the slowdown in the auto industry, while addressing a press conference in the month of September. She said that Millenials’ preference for ridesharing companies such as Ola and Uber instead of committing to paying EMIs for a personal vehicle is partly responsible for the slump in the automobile sector.

Yes, but, the fact that some of us Millenials have commitment issues is a tale as old as time. So, what else is new? I’ll tell you. According to a much delayed NSSO report (the Periodic Labour Force Survey), the unemployment rate in India grew to an alarming 6.1% in 2017-2018. This record-breaking 45-year high means that a lot of us Millenials don’t have the jobs required to pay for a car of our own.

Ridesharing services are not only conveniently priced but also offer other attractive features such as a wide variety of cars, real-time navigation, Wi-Fi, live location tracking for safety-related concerns, etc. Unfortunately, we don’t seem to have huge wads of cash to burn a hole in our pockets and we like good deals (this is not to say that Ola and Uber are chaste and ethical).

I would also like to draw your attention to the State of Global Air report (2019) which said that in 2017 over 1.2 million people in India died due to air pollution. That’s almost the size of the entire population of small African countries such as Eswatini (previously known as Swaziland) or Djibouti! This statistic should be read and understood as a major loss of human potential, apart from being frightening otherwise.

As a country, we have been struggling to revive our doddering economy and cut down on our toxic emissions at the same time. Would the Finance Minister prefer that we disrupt the aforementioned delicate balancing act by purchasing a lot of cars needlessly so that our economy might see a glimmer of hope but our environment will go down the drain? Sorry, but we care about the environment and about ourselves.

Even if were to agree with Sitharaman’s inadequate explanation, what about the deceleration in the textile industry? It’s a miracle that Millenials haven’t been blamed for this (yet), considering our preference for short clothes. Whether it is the once-booming real estate sector or the FMCG sector in rural areas–signs of a slowdown are everywhere.

Giving Sitharaman tough competition in making tall claims is her colleague from BJP, Ravi Shankar Prasad, our current Union minister holding multiple portfolios including Law and Justice, Communications, Electronics and IT. He made an equally ridiculous assertion when he implied that the success of three Bollywood movies, which earned 120 crore rupees in a single day, is an indicator of a sound economy.

Defending the prowess of the Modi government on the economic front while campaigning for BJP in Mumbai, he said that some people were leading others astray and dubbed the NSSO report as ‘misleading‘. I wonder what prompted him to withdraw his statement just a day after he made it if he was convinced that the business of three films on a holiday amply reflects the soundness of our vast economy (presently, a $2.7 trillion economy). It looks like the BJP minister was suffering from a serious case of foot-in-his-mouth.

Incidentally, Komal Nahta, the Bollywood trade analyst that Prasad was quoting, spoke to India Today TV where he said that though the minister is factually correct, he was overzealous in his interpretation. “The film industry and Bollywood both contribute very minimal-like, minuscule-level to the economy. One or two percent maybe! The film industry is very glamorous their figures of business are always out in public, therefore, it is just an attraction,” said Nahta.

Using absolute figures without comparing them to a benchmark is an erroneous approach. It doesn’t give you an honest picture of the ground reality. In fact, private consumption as a percentage share of the GDP has declined from 58.7% in the first quarter of 2018-19, to 57.7% in the first quarter of 2019-20. So, it can be said that it was Prasad’s comments which were misleading and not the NSSO report as he professed. All said and done, the cat is out of the bag.

The chief of the IMF, Kristalina Georgieva, said that the effect of a global “synchronised slowdown” is being felt more intensely in emerging economies such as India and Brazil. Aspirations of becoming a $5 trillion economy seem especially ambitious right now, given the sorry state of the Indian economy.

Note: The author is part of the current batch of the Writer’s Training Program

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Featured Image credit: Getty Images, Flickr.com
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