New Delhi, Jayaprakash Ranjan. The corona virus can have a huge impact on the country’s economy. From the data released by the government on Friday for the last quarter of the last financial year and the entire year, it is clear that we have entered the Kovid-19 era with a very weak economy. The growth rate of GDP in the January-March (2020) quarter has been just 3.1 percent and the rate of economic growth during the whole year 2019-20 has been 4.2 percent. Whereas in its previous year 2018-19, a growth rate of 6.1 was achieved.
This rate of economic growth is the lowest level in the last 11 years. At the same time, these figures also show that the economic growth rate has been decreasing for the last eight quarters and it is expected to go down further in the April-June quarter and the year 2020-21. This situation will not only dispel the dream of becoming a $ 5 trillion economy by the year 2025, but it will also give a deep rebuke to the efforts to quickly remove poverty and unemployment from the country.
According to the data released by the central government, in the last quarter of the year 2019-20, the state of agriculture, mining and government administration and allied services apart from any other sector (manufacturing, construction, electricity-gas-water supply, financial services etc.) improved. Is not. The manufacturing sector declined by 1.4 per cent as compared to a growth of 2.1 per cent in the same period last year.
The construction sector, which provides large-scale employment, declined by 2.2 per cent as compared to an increase of 6 per cent in the same period last year. The growth rate of services like hotel-restaurant-transport-communication in the service sector has fallen from 6.9 per cent to 2.6 per cent. The growth rate of the financial services sector has come down from 8.7 percent to 2.4 percent. The above four sectors provide maximum employment opportunities and their share is continuously increasing in the entire economy.
The only better situation has been agriculture, whose growth rate has improved from 1.6 percent recorded in January-March 2019 to 5.9 percent in January-March 2020. Along with the release of these figures, it has also been told that due to Kovid-19 all the data has not been collected yet, so it will be further revised.
This report on the direction and condition of the economy raises some serious questions about the current economic policy. For example, for the year 2019-20, the government and RBI had targeted to achieve a growth rate of 7 percent. In September 2019, two months after presenting the full budget in July 2019, the Finance Minister made several announcements to overcome the recession. The historic step of reducing corporate tax was also taken and GST rates were reduced on hundreds of products.
Huge investment in infrastructure sector was announced. But the decline in the quarterly growth rate suggests that these steps did not have much effect. There are already questions on how the government is collecting the data of the economy. Now that most of the economy has been closed for almost two months due to Kovid-19, the economy may slow down further. No government agency has yet set any target of economic growth for the year 2020-21.
While presenting the budget, the finance minister had talked about 10 percent nominal growth rate. Which can be called a big target in the current situation because according to the data released on Friday, it is just 6.8 percent. A data released by the Commerce Ministry on Friday shows that eight major industries have registered a decline of 38 per cent during April 2020. However, India can be satisfied that its economy is still better than China. China’s economy declined by 6.8 percent in January-March 20.