economic

Difference In 2012 & 2019 slowdown – Free PDF Download

 

SOME FACTS

  • At 5%, India’s economy registered its slowest gross domestic product (GDP) growth rate since 2014.
  • However, the current GDP figures are no indication of any impending recession.
  • In India, the economy is growing.
  • However, the rate of growth has slowed down, which is a setback for the country as it requires an accelerated growth to provide employment to millions entering the job market every year.
  • A slowdown in growth rate would turn the population dividend into an unmanageable burden.

DIFFERENCE B/W 2012 & 2O19

GROWTH RATE

  • Before 2012-13, the last time the GDP growth rate had slipped below the 5% mark was in 1984-85 and continued till 1987-88.
  • Since June 2012, the earliest period for which we have quarterly GDP statistics for the current series, GDP growth has only been slower than 5% twice.
  • It was 4.3% in March 2013 and 4.9% in June 2012.

  • In the current slowdown the GDP has not yet slipped below 5%.
  • But there is a high probability that for the next 2 quarters it may go even below 5% before it again rebound.

 INFLATION

  • Inflation in 2012-13 was very high compared to what it is now.
  • In earlier slowdown the inflation even touched the double digit.
  • However it has remained around 4% in the current slowdown.

 REASON FOR SLOWDOWN

  • During 2012-14, the GDP growth slipped below 5% mark on the account of what is now known as policy paralysis.
  • Policy paralysis is an inability to move or do something.
  • When policies are in place but the person who has to move them does not perform the relevant changes due to many reasons.
  • Like- Corruption, Environment clearances etc.
  • However the current slowdown is interspersed with a series of policy decisions.
  • Two mega policy decisions — Demonetisation in 2016 and the rollout of GST in 2017.
  • The policies were aimed at greater formalisation of the Indian economy.
  • But the twin disruptions struck a big blow to the informal sectors that employ the maximum number of the workforce

 

 

 

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