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For the first time in 40 years, the decline in consumer spending affected the GDP growth

Saturday - November 16, 2019 1:29 pm , Category : BUSINESS
Global economic slowdown becomes the biggest concern for the Modi Government
Global economic slowdown becomes the biggest concern for the Modi Government

The Modi Government faces a 'big setback' on the economic front 

NOV 16 (WTN) - The global economic slowdown has affected the fast-growing Indian economy to a great extent. The crisis of economic recession is getting deeper in the country, and this is being confirmed by statistics. However, it is not that only India's economy has been affected by the economic downturn. According to the International Monetary Fund, 90 percent of the world's economies have been affected by the global economic downturn for some reason. But India is paying a great price for the economic recession. 

For your information, let us know that the figures for the recently released falling in industrial production and the rising in the inflation indicate the impact of the economic slowdown. But now the new data released by the NSO (National Statistics Office) has added to the trouble of the Modi Government. According to the information, for the first time in the last 40 years, India's consumer spending has decreased in the year 2017-18. 

According to the latest survey by the NSO, in 2017-18 fiscal, consumer spending in India has registered a decline of 3.7 percent and has come down to Rs 1,446, whereas in the year 2011-2012, an Indian spent an average of Rs 1,501. For your information, let us know that all these figures are made on the basis of real-time data, which means that they have been adjusted according to inflation data.

The data released by the NSO shows that people are now spending less than before. In the survey, people have reduced spending in rural areas as compared to cities. In the financial year 2017-18, the consumer expenditure in villages has registered a decline of 8.8 percent. According to the survey, people are now spending less money on food items. In this too, people in villages have reduced consumption of milk and milk products. Apart from this, there has been a decrease in the tendency of people to spend on clothing, consumer durables, education and rental of houses.

Amidst all this, the world's largest rating agency Moody's Investor Service has slashed India's GDP growth rate once again. Moody's has reduced its estimate for the current fiscal year 2019-20 from 5.8 percent to 5.6 percent. For your information, let us tell you that in the first month of October itself, Moody's reduced the GDP growth estimate for the current financial year 2019-20 to 5.8 percent. That is it is clear that due to the economic slowdown, the country's growth rate may be lower than anticipated in this financial year. 

But there is news of relief for the Modi Government. Rating agency Moody's says that economic activity in India will increase in the year 2020 and for this reason, the GDP growth rate in the year 2020 and 2021 is estimated to be 6.6 percent and 6.7 percent respectively. But due to the economic slowdown, the economic growth rate in the current financial year will be less. For your information, let us know that recently Moody's has reduced its outlook about the Indian economy from 'stable' (stable) to 'negative'.

According to Moody's, India's economic growth rate has come down since the year 2018, and that is why the GDP growth rate has come down from 8 percent to 5 percent in the second quarter of 2019. Moody's in its report has explained with the analysis that there has been a decline in investment activity in India earlier, but at that time there was a boom in the economy due to strong consumer demand, but the problem with the current sluggishness is that this time the consumption decline is also seen.

So it is clear that the NSO figures and Moody's estimates are showing that India is in the grip of an economic recession. It is not that the Modi Government is not taking any measures to deal with the economic slowdown. The Modi Government has made a lot of effort to deal with the economic downturn, but these efforts are proving inadequate in the face of the economic downturn. It is expected that by the end of the year, the ongoing trade war between the US-China may be over, after which the effect of the economic slowdown will start diminishing from the month of March next year. So it is to be hoped that as soon as possible the impact of the global economic slowdown in the country is reduced and once again the country should move rapidly on the path of economic development.