The deteriorated Economy of India experiencing Low Growth and Unemployment

Declining Economy

 

 

These past recent months, there have been talks of weather India is staring at an Economic Crisis. The Indian Government, have tried to tone down this matter by saying that India is just going through a slowdown which is natural as a result of generalized Global Economic slowdown that is affecting even the developed economies of USA, UK,Japan and other countries around the world. However, latest data released for the 2nd quarter of 2019(July to Sept period) has given us clear data that indicate that the rate of growth of the Indian Economy has not just declined drastically but majority of the India’s population have got poorer, are consuming less and are unemployed.

Economic Crisis Situation

 

Wire news report on Indian Economic Performance 2019 Q2 Period
https://thewire.in/video/watch-the-wire-business-report-understanding-the-q2-gdp-slump

Overall growth of Indian Economy is poor reflected by Sub 5% GDP growth

GDP growth has been just 4.5% which is the lowest since 2013 Quarter 4 period. This means that the growth experienced by Indian Economy to provide jobs to it’s more than a billion population right now is just not enough!!!

Declining Economy

 Declining Growth Rates of the Major Sectors of the Indian Economy

In Q2 Manufacturing Sector has grown by 2.6%, Construction sector by 3.2% and Agricultural Sector has grown by a really dismal 2.1% , all these sectors are experiencing a decline in growth rates in comparison to Quarter 1 period of 2019.

 Industrial Production is at a low

Industrial and Manufacturing Activity have contracted as indicated by contraction of the core sectors of Indian Economy by 5.8% with a decline in production of crude oil, natural gas, cement, coal production, electricity, steel etc.

This indicates that there is less demand for these essential products required by Construction industries and manufacturing units for production and infrastructure building activities, due to them not doing much in their building and production activities.

 Investment in the Economy has grown by less than 1%

Investment in India by business entities was less than 1% in this period with the investment rate gone down to 28%, meaning no companies and business entities are confident to invest in India at present. This is despite the measures taken by the current Government to induce industries and companies to invest more with the Government having exercised its monetary policy of Repo rRate cuts so that industries and companies get cheap loans for investment purposes.

Besides cutting of interest rates, India’s Finance Minister Nirmala Sitaram also gave tax reductions to Corporate Entities amounting to 37,000 crore, even then investment has not picked up. Generally, if the above measures don’t work, it could only mean that there other issues ailing the Indian Economic Environment that needs to be fixed, for investment and growth to pick up.

 Unemployment, income inequalities and increase in Poverty

More worrying truths that are ugly emerge as well as rural distress has only increased, along with 7% increase in unemployment with their consumption having come down by 2% according to the 2018 leaked data of National Statistics Office (NSO).

Poverty has increased as well, with income inequalities having grown at vulgar proportions!! The majority of the section of India’s population who are in the bottom of the pyramid, are only getting poorer day by day.

 Retail inflation with low growth in economy and unemployment a worry!!

In the months of November and December, Retail inflation had risen to
5.54% and 7.35% with increase in prices of essential food items – milk, vegetables, egg, fish and meat. A majority of India’s population are low income population, along with low growth in job opportunities and unemployment, rise in prices of essential food products will have them not able to even afford food for basic nutrition!!

Outlook news on India’s retail inflation
https://www.outlookindia.com/website/story/business-news-retail-inflation-jumps-to-735-in-december-2019-against-novembers-554/345659

The Structural issue in the current Indian Economic System

There have been discussions relating to whether this Economic slowdown is cyclical or structural, meaning are there inherent problems prevalent in the Indian Economic System that are the reasons for this economic low growth or is this just a natural economic cycle?. The answer to this is yes, there are structural issues crippling the Indian Economy. Since years the GDP growth of Indian Economy only grew because of profits made by the Corporate sector, but a large section of India remained poor and India’s rural economy has been destroyed.

Wire’s News article – 
India’s former chief statistician, Pronab Sen on India’s economic situation
https://thewire.in/video/watch-india-economy-karan-thapar-pronab-sen-interview

Farmer suicides since years because of Poverty

Agricultural Sector that comprises of farmers and labourers that provide food security to the entire Indian country have never procured a decent remuneration to make a living even though the goods that they produce have a permanent long standing demand as everyone of us are consumers of food materials for our survival, health and vitality!! Add to this they often are exploited and stressed due to the pressure of them needing to pay back loans, due to which many have been committing suicides.

The Workers and Labourers have always been paid very poorly

The workers and labourers in factories and industries are the real producers, but they never had job security even though their employers like big car companies, tyre companies, Construction companies and others make profits using their services, their wages also have been unfairly low when compared to the value they added to the Economic system. This was the case even when India experienced an economic boom, when Manufacturing and Construction companies were expanding and making profits.

https://www.networkideas.org/featured-articles/2018/08/factory-workers-in-india/

 India’s Rural Sector been destroyed

Traditionally, India’s rural Sector provided jobs to people in occupations like handicraft making, handloom cloth business, there were fishermen, farmers, small vendors, hawkers, khadhi weavers etc. These jobs were supporting giving livelihoods to lakhs of people in the area without the need for them to take that difficult step of migrating to urban areas and struggling to make a living there. However, that sector has been neglected by the Indian Government, as a result India’s poverty levels remain high.

SMEs are important as they provide employment to many

Small and Medium Enterprise segment (SMEs), that comprise of small and medium sized businesses do provide employment to a large population, but that segment has largely been ignored in the current Economic System which has favoured only capitalist entities in India!!

 India’s GDP could be more if the neglected sectors are developed and grown

India’s GDP would definitely have been better if all it’s sectors of Economy were nurtured and attended to by the Indian Economic System. So, farmers, weavers, textile workers, labourers, workers, fishermen, small and medium enterprise constituents would have earned enough to lead a dignified life. Then with enough money in their hands, their purchasing power would be constant enough to keep them demanding essential goods and services – food, electricity, healthcare, education services and other goods required by them which would have a positive and real increase in India’s GDP.

India’s prosperity only possible if the neglected sectors are revived

It is high time India becomes that country where poverty is eradicated and everybody has enough to lead a decent basic standard of living. India’s Economic system of production has been unjust to the majority of its population involved in occupations mentioned before (agriculture and farming, traditional textile industry comprising khadi and handloom garments, small scale industry constituents, fishermen, factory and industry workers and labourers, hawkers, handicraft artisans, weavers and more) .

Here is a write up on how the small sector players actually employ people – rural women and even disabled youth – 

https://gramsevasangh.org/2019/11/13/sacred-economy-in-the-real-world-and-its-positive-impacts/

India’s Banking Sector crippled with NPAs

Another, really troubling fact is that Big Corporates and individuals have cheated many Public Sector Banking institutions with non-repayment of loans and gotten away with it for a long time. This has affected the common man, as when there are bad debts and non-performing assets(NPAs), the hard earned money of the bank’s depositors are unsafe, with the bank not having liquidity to pay back it’s depositors with all that the amount lost as unrecovered loans.

Outlook Magazines story on Indians fear in having their saving in Public Sector Banks
https://www.outlookindia.com/magazine/story/business-news-is-your-money-safe-why-indians-are-losing-their-trust-in-banks/302302

One of the latest cases is of Punjab and Maharashtra Co-operative (PMC) Bank not able to recover Rs 4355 crore loan which it lent to Housing Development & Infrastructure Ltd. Due to this, there were concerns on PMC’s money liquidity availability and Reserve Bank Of India (RBI) intervened imposing restrictions on Depositors on withdrawing their own money from the bank. It has to be noted that mostly the common man with small earnings are affected here with their years of hard invested savings being insecure in a public sector bank.

Now figures show that Bank Credit lending has come down by 88%, banks are not comfortable to lend to companies like before in fear of NPAs increasing as these companies may not be able to pay the loan back in the prevailing economic climate which is not looking promising.

India’s Economic System favouring mostly the Big Corporate Entities been harmful

The above case is just one example of bad loans, owners of profit making companies like Kingfisher’s Vijay Mallaya and jewel company businessman Nirav Modi have gotten away from India earlier without paying back the loans and advances they secured amounting to crores of money. All this definitely shows that India’s Banking Sector is not healthy which is required for the good financial health of the Economy. This also reflects how big companies and businessmen get easy money from the system, that’s not the case for small sectors discussed before, even though the small sector has potential to employ a lot of population lifting them out of poverty and hardship.

India’s earlier GDP growth numbers due to economic boom benefiting only a small section

Now, all these problems existed for a long while, but India sustained some growing GDP numbers as IT companies and other constituents in the capitalist system employed a small section of people who earned degrees and worked hard. India’s GDP growth, was definitely one sided it never reflected the prosperity of the Nation as a whole.

Growth of Nation cannot happen just by encouraging sales of cars, aiding the automobile industry to grow, or sale of real estate that’s also a costly market, or being happy with earnings that come from air travel, or gold jewelry sales anymore. Government must cater to the requirements of small players rather than having India’s GDP grow by stimulating demand of the upper class segments on products and services of big companies, industries and economic powers. This is definitely a monster economy not giving a level playing field to small players!!

 Demonetisation worsened India’s Economy

Lately, India has further fallen deep into the economic crisis mess because of certain policies of the BJP Government led by Prime Minister Narendra Modi, namely Demonetisation and GST tax regime.

Demonetisation in November 2016 had the Government declare old issues of 500 Rs and 2000 Rs notes to cease as acceptable legal tender to be replaced by new version of those currency notes.

Demonetisation, resulted in small entities in neglected sectors not have money liquidity to sustain business, overtime they were forced to shut down and lakhs of people lost jobs. Added to this, came the Goods and Services tax (GST), this magnified difficulties for the small, neglected sectors discussed before, as they could not pay tax and this increased their distress. Ideally, small and medium Industries and businesses should be exempted from tax until they mature with constant earnings and prosperity.

 Corruption eating away precious money…

Much more can be said on India’s Economy, especially how precious money is lost in corruption wastages. Even though India Metro Cities are saturated with unsustainable and unplanned development, more projects that are not required are introduced like the needless flyovers,skywalks, dam building on free flowing rivers and other things. Often, money gets allocated for those projects, and corruption has officials pocket money. Again, big companies that get tender for the project get fatter making money out of it. However, no development happens in rural areas which lacks basic roads, healthcare and educational facilities. There is no balanced all around development that would benefit the entire Nations with prosperity and peace.

 India needs to sort this situation else it’s going to be a prolonged suffering

A must mention is resulting deterioration in environmental conditions in India with Government having allowed big economic entities to pollute rivers, cut trees, reduce forest cover for business projects of big companies and industries.

India is definitely in a mist of a big economic and environmental crisis, hopefully, Government at least encourages all the sectors that became marginalized as they were neglected to develop now, so farmers, weavers, textile workers, artisans, labourers, small entrepreneurs, small and medium enterprise businesses workers get to earn a living and many millions of population get employed and skilled working in these sectors.

 

Union Government had talks with Gram Sangh Seva Sacred Economy Satyagrahis

A delegation of Gram Seva Sangh representatives met  with the Union  Minister of State for Micro, Small and Medium Enterprises, Pratap Chandra Sarangi to discuss over Gram Seva Sangh’s demands and proposal to rejuvenate the Sacred Economy. 

Gram Seva Sangh mentioned that a separate Ministry for the Sacred Economy sector should be created that would be dedicated in developing all the Sectors that come under  the classification of the Sacred Economy – farm sector , handloom sector that comes under textile ministry, Khadi and village industries sector , handicraft sector, MSME etc . Currently there are 12 ministries in the current system that can be termed Sacred and they need to come under one Ministry.

The Sacred Economy Ministry would also look into the welfare of labour groups – garments workers,  pourakarmikas and anganwadi workers etc. The ministry should be given appropriate funding, restructuring of the Sacred Economy must be done and Zero tax should be imposed on all sectors of Sacred Economy.

The Minister told Gram Sangh Seva group that he would discuss the demands thus stated with the Government Authorities and revert back within a month. Overall the meeting went well with Gram Sangh Sava being well received and heard. 

For the preliminary report submitted by the delegation click Bulletin_131_The_First _Meeting_bw_MSME_GOI_delegation_of_GSS

Note: Only correction in below The Hindu report is, we are not demanding only for Handmade sector, we are demanding for Handmade plus the small sectors (less than forty percent automation) belonging to the automatic machine sector. That is what we defined as Sacred Sectors.

The Hindu Report:

thehindu.com/news/national/karnataka/prasanna-meets-union-minister-demands-separate-ministry-for-sacred-economy/article30221702.ece

 

New Indian Express Report:

https://www.newindianexpress.com/states/karnataka/2019/dec/07/create-separate-ministry-to-protect-sacred-economy-activists-2072623.html

Gram Seva Sangh’s Sathyagraha in Support of Sacred Economy (Oct 2 to Oct 11)

Gram Seva Sangh, an Organisation working to revive livelihoods of the rural and marginalised communities of India and bridge the gap between the urban and rural communities, have been pressing the Government recently to focus on developing the Sacred Economy.

Campaigning for the revival of the Sacred Economy

In short, the Sacred economy are those jobs that have been neglected to be developed in the current economic system and therefore this section of the workforce have become marginalised groups struggling to make a living, as these jobs have been destroyed but still they hold relevance. 

Our farmers, labourers, small traders, vendors, khadhi designers, crafts men, garment factory workers, fishermen, etc , need to thrive and this is possible only when the Sacred Economy is revived through refinance, zero taxes and restructuring of the economy.

Gram Seva Sangh, started a Satyagraha campaign in support of the Sacred Economy to get the Government to hear the demands to revive the Sacred Economy and respond positively. 

The wisdom behind the Sacred Economy embodies the philosophy of Mahatma Gandhi, who embraced khadhi and chakra supporting them because he rightly believed they represent India’s strong, traditional, domestic economy that has given livelihoods to many people, making them self reliant to lead a life of dignity. Traditionally, the Indian economy has been giving jobs to weavers, farmers, khadhi designers and others who have unfortunately become marginalised groups today .

So, in tune with this philosophy inspired by Bapuji’s wisdom, Gram Seva Sangh adopted the non-violent yet powerful weapon of Satyagraha and launched a Hunger Sathyagraha campaign to have the Government officials hear the demands for Sacred Economy and take needed positive action.

Satyagraha began on Oct 2, Mahatma Gandhi’s birthday

The Hunger Satyagraha in support of Sacred economy began on October 2, 2019 which was  Ganjayanthi, the day, the Nation celebrated the 150th  birth anniversary of Gandhiji. The venue the Satyagraha took place was at  Vallabh Niketan, Bangalore.

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Centenarian freedom fighter H. S. Doreswamy supporting the Satyagraha

https://www.news18.com/news/india/satyagraha-for-sacred-economy-activists-on-hunger-stir-in-bengaluru-seek-jobs-clean-environment-2336673.html

https://www.nationalheraldindia.com/india/theatre-director-prasanna-set-to-sit-on-an-indefinite-satyagraha-for-the-economy?fbclid=IwAR2VYZrCZw5iOw7ceqwinbiVEFa7IeySITRPKJlcVM94W94-9M32pCd-Y_Q

Fasting Satyagrahis in support of the Sacred Economy

Environmentalist ,Vandana Shiva, voices support for the cause of Sacred Economy

From October 2 to October 5th, the Satyagraha had fasting done by many supporters of this cause for a day taking turns, but from October 6th, the Satyagraha led into an indefinite fast done by Gandhian, theater artist and founder of Gram Seva Sangh, 68 year old Prasanna who is also the founder of Chakra, an Organisation that has given livelihoods to hundreds of women since 1995 employing them in making garments using khadhi. 

Prasanna on Infinite fast demanding Govt. to take steps for the revival of Sacred Economy

From Oct 2th to 5th, whenGram Sangh Seva was in its relay fasting stage, we had the following supporters who fasted for a day or more taking turns in support of the Sacred economy – Abhilash, convenor of Gram Sangh Seva, Abhilash, convenor of Gram Sangh Seva, SR Hiremath, anti-corruption crusader, whistleblower and social activist, Abay , convenor of Grakoos (Gramina Cooli Karmikara Sangathi), Hanumath Yeswar, IAS aspirant, Kusuma Shanbhag, kannada journalist.

https://khabar.ndtv.com/video/show/prime-time/theater-artist-prasanna-on-hunger-strike-529447?fbclid=IwAR2y1AzzdT7gfT8T_sQDExHgMm_ktvO1JsYK7FnRHqwGqOz3UKOdlutbdd8

Satyagraha called off on assurances provided by Union Minister, Sadananda

The Satyagraha was called off on October 11th, as Union Minister of Chemicals and Fertilizer Minister, Sadananda gave assurance that he would arrange a meeting with Finance Minister, Nirmala Sitaram and  the Ministry of Micro, Small & Medium Enterprises(MSME) where Gram Seva Sangh members can put forward their demands in person. 

Union Minister, Sadananda assures Prasanna a meeting with  Finance officials

https://www.thenewsminute.com/article/karnataka-activist-calls-hunger-strike-after-union-min-sadananda-gowda-intervenes-110401?fbclid=IwAR3ilrkWk5O2zE6pMCq5hcfyII0bPDp21jROpDjwezHBIp7HhHP0cyxfqH8

Prasanna had broken his indefinite fast after 6 days of fasting on the 118th birth anniversary of Jayaprakash Narayan.

Prasanna breaks fast on assurance  given by Union Minister, Sadananda

Prominent personalities who supported the Sathyagraha

Ramchandra Guha gave his voice in support of the Sacred Economy

There were many noted individuals who lent voice and support to strengthen the campaign with cenetarian freedom fighter, H. S. Doreswamy,  environmentalist, Vandana Shiva, famous Gandhian, EP Menon, historian, Ramchandra Guha, journalist Ravindra Tripathi and many more emitent social activists, environmentalists, journalists, artists, writers who supported the campaign speaking up for revival of Sacred Economy.

The Sathyagraha found support from well  known political figures as well – former Prime Minister Shree HD Devegowda , former CM Siddaramaiah , Minister for Primary and Secondary Education, S.Suresh Kumar, Karnatak Janata Dal United president,Mr Mahima J Patel ,  former speaker of Karnataka assembly, Mr Ramesh Kumar, had all visited the venue of Satyagraha and met Satyagrahi Prasanna, and expressed their solidarity for the cause.

 HD Devegowda and CM Siddaramaiah in the dias of Satyagraha supporters
Former speaker of Karnataka assembly, Mr Ramesh Kumar at the venue

Dr. Ashwathnarayan C. N., Deputy Chief Minister of Karnataka, Minister for Higher & Medical Education, IT & BT, Science & Technology also visited the venue to understand the demands of Gram Seva Sangh for revival of the Sacred Economy, and later Union Minister, Sadananda visited and took it upon himself to have Gram Sangh Seva’s expert committee get a meeting with Finance Minister, Nirmala Sitaram and the  Ministry of Micro, Small & Medium Enterprises(MSME) so they can discuss these wise Sacred Economy demands with the Government.

Deputy Chief Minister of Karnataka, Dr. Ashwathnarayan meeting the Sathyagrahis

Work to strengthen the campaign continues…

Gram Sangh Seva continues its campaign in support for Sacred Economy. This initial phase of Satyagraha had succeeded in getting the message across to the Government and getting assurance from  Union Minister, Sadananda in arranging a meeting with the Finance Ministry where Gram Sangh Seva’s expert committee can discuss the Sacred Economy demands. 

Please read about the release of the Sacred Economy demands that happened during the Satyagraha.

Concluding this with a poem composed highlighting Gram Sangh Seva’s demand for reviving the Sacred Economy -:

“Give jobs, give jobs, give us those jobs that keep the green,
Give jobs, give jobs, give us those jobs that keep civilisation civilised,
Give jobs, give jobs, give us those jobs that don’t kill jobs,
Give jobs, give jobs, give us those jobs that do not kill villages,
Give jobs, give jobs, give us those jobs that do not change the climate,
Give jobs, give job,  give us those jobs those jobs that keep nature natural,
Give us jobs, give us jobs”