'Indian economy has rung 3 alarm bells, the new govt must deal with it within 100 days' https://youtu.be/fFH2No5Ebq0 29th May 2024 Sharad Raghavan
The new government should not be blinded by the strong GDP growth numbers that will come out at the end of this month. There are 3 economic alarm bells ringing, which need urgent attention, Deputy Editor TCA Sharad Raghavan argues in
https://theprint.in/opinion/standard-deviation/indian-economy-has-rung-3-alarm-bells-the-new-govt-must-deal-with-it-within-100-days/2104294/
Modi govt's GDP growth data for 2024-25, expected this month, must not overwhelm the senses of the new government that comes to power in June.
The first alarm bell is the sheer exuberance in the stock markets. Speak to any analyst, and they will tell you it is being driven by investments in small and mid-cap stocks. That is, small investors are putting their money in small — and often volatile — stocks.
second alarm bell. People taking loans for survival. data from the central bank shows that these loans are still growing at strong double-digit rates. These are not loans to buy houses, cars, or appliances. These are also not education-related loans. These are credit card spends, and desperate loans taken for what the RBI classifies as ‘other personal loans’ but which are, in actuality, loans for survival.
third alarm bell, is foreign direct investment into the country.FDI has been falling for a few years now, as has India’s share in global FDI, which shows foreign companies are increasingly choosing other countries. One of the major reasons is difficulty in procuring land and dealing with India’s labour.
The solutions? The first is for the Centre to repair its increasingly fractured relationship with the states. State governments must remember that FDI might be tracked at a national level, but it actually comes to the states. There are huge economic benefits to working cohesively with the Centre on attracting more foreign investment instead of treating it as attracting investment despite the Centre
The other two solutions are to do with land and labour, both issues that have plagued India’s economy for decades. Procuring land needs to be easier, and hiring labour less fraught