With 2020 already set in, Indians are anxiously waiting for this year’s budget. On this occasion, both the BJP and Prime Minister have called for suggestions as to how should the budget be presented and in what form. The main concern is to know how the nation’s economic standards can be elevated from the present fragile state.
As we all know, the previous budget session ended up publicising bahi-khata and promising to deliver this year. There seems to be lack of innovative ideas to divert one’s mind. Taking a reality check, Modi has invited public participation.
In 2013, Fragile-Five was the term coined by BJP for the economy during the Congress regime. That time, the status of the economy was almost low and these five countries in order were Brazil, India, Indonesia, Africa and Turkey. And the point to be noted here is today’s much focused, much targeted and much politically baked Pakistan was not in this list. People comment on Manmohan Singh inspite of the fact that India was in a better position with economic slowdown and with this point somehow there were many forces that tried to topple the Congress. The prime minister aspirant Narendra Modi was at good best mocking Manmohan Singh for this and various reasons. Soon after results Modi took over as PM and gave illusionary hopes to the people. But unfortunately, the popularity of Modi could not bring aspired and most required change to the Indian economy.
Facing another downfall and apparently more serious than ever, there are talks about India returning back to Fragile Five and that too on a number one position. The financial conditions of India is at outrageous level. Many think tanks, economists and market surveyors’ reports regarding comparatives of economic state on Fragile-Five during Narendra Modi’s regime and Manmohan Singh regime are simply rejected. Including BJP leaders like Subramanian Swamy and financial experts of this country believe, that after Arun Jaitley there is no one in the party who is capable enough of handling the financial portfolio. The lack of experience of Nirmala Sitharaman is criticised by her own husband.
Even Subramanian Swamy expands his vocal cords time and again on the ailing economy and asks BJP to allot him the said portfolio for enhancing the financial economic standard of the country. Though he might be good at economy, BJP always feels threatened by him due to his vocal criticism. Now you will question, why is he entertained in the party?
The reason is simple, his frequent attacks on the Congress and Sonia Gandhi have benefited the BJP. Moreover, as being into the party, he will not be a bigger threat than in opposition. Maybe it’s the ideology which has kept them together.
Now debate is all about India’s economic slowdown and BJP glorifying the fact by providing misguiding statements.
The Fragile-Five club was coined to refer to excessive dependence of these countries on investment from outside to fund their economic growth. This is where India’s current slowdown is different from the fragile-five phase. India has received foreign investment to the tune of 27.2 billion in the first half of 2019, the government said in the last week of December 2019. The problem is that the domestic investment has been sagging. Back then, fiscal deficit of the central government was at 5 per cent and combined fiscal deficit was at about 8 per cent of the GDP. Currently, fiscal deficit of the central government is less than 3.5 per cent of the GDP. Consolidated fiscal deficit is likely to remain around 6 per cent of the GDP. However, Fitch Ratings in November said that the consolidated fiscal deficit may be around 7.5 per cent of the GDP which is a cause of serious concern. Current account deficit, foreign exchange and health of the rupee were other concerns when India was clubbed in the fragile-five club. Back then, the current account deficit was 5 per cent of the GDP. Today, it is much better in number.
For the September quarter, the current account deficit was below 1 per cent of the GDP. It was 2.9 per cent of GDP in 2018-19. The current situation is, however, not a good news as it is not because of spurt in export but declines in imports on account of low consumption and demand in the country. Foreign exchange reserve is good and at an all-time high. This is why India is confident of comfortably bracing the US-Iran tension. Rupee was a concern then and it remains a concern now as well. In 2019, rupee breached 72-mark against dollar on a few occasions. Looking at the larger picture, the state of Indian economy still remains sound. But creating demand, employment, consumption and fixing the issues of manufacturing and construction sectors remain a challenge for the government. Anyway, India is heading to the Union Budget 2020 and the Prime Minister Narendra Modi has called for suggestions from you in case you have some ideas to turn Indian economy towards a better position. So, what are you waiting for? There are many options available on micro blogging and social media to connect and suggest.
(Any suggestions, comments or dispute with regards to this article send us on [email protected])