India’s GDP Crashed: Act of God or Act of Fraud? It is not long ago that we talked about a double-digit growth and our economy used to be the fastest-growing major economy in the world and today, we stand at a point where our growth has sunk to around minus 24% (minus 23.9% to be exact).

Here, we will talk about why that happened, but today, take a look at some statistics first which have been released by the NSO- National Statistical Office and not just one sector, the entire economy presently lies in shambles Speaking of Industries, the sector slumped 38.1% in the months of April, May and June Services minus 20.6% down, Manufacturing minus 39.3% down, Agriculture was one sector that was still in the positives at 3.4% Trade, Hotels etc were down by minus 47%.

This is the deplorable condition of the economy that we are witnessing today. We have now become one of the world's worst-performing major economies and have witnessed a massive contraction of around 24% in the economy. We were already warned though. We were told that this is "An Act of God". Here, we're raising a simple question today- Keeping in mind that corona has ravaged many countries, why has the performance of our economy been so pathetic?

It is essential to know whether this is an act of God or an act of Fraud! All through the last year, we have been reiterating the importance of the economy and where our economy has been heading Counting from last July-August, we told you about what the conditions pertaining to GST are, We told you about the data concealment and how important, critical data was being kept from us. We also told you about how demonetization has now proven to be one of the worst cases of economic policy (We told you about)how the government policies are deteriorating and how profitable PSUs are being sold off because the government was running short of money and how profits were shrinking and unemployment was rising.

We already had all these warning signals. The bar of our GDP kept falling. The "Staircase" of our GDP was going down in almost a synchronous manner- as if it could only have been God's doing and no human was capable of that. The GDP was already tumbling down since the last 8 quarters and now, it has been dealt a blow by corona as well and we have finally fallen down to the level of minus 24%.

In a quick comparison, talking about the United Kingdom, the state of UK was being spoken about amongst the G20 Nations; Its GDP growth rate had fallen to minus 20.4%. The GDP of France contracted by about 13.8%. The GDP of Italy contracted by about 12.4%. The GDP of Canada contracted by about 12%. The GDP of Germany contracted by about 10%. The adjusted GDP of USA had shrunk by 9.5%. If the rest of the countries are in this state, how did such a big problem emerge in India? One clearly perceptible problem is that we treated India as a "state" shutting everything down indiscriminately and indefinitely.

Experts are of the opinion that India should be viewed as a "Mini Europe". We, in contrast, viewed India as a state Either everything is open or everything is shut Graded lockdown should have followed the initial lockdown- states should have been allowed to decide what areas should be on a lockdown, in consonance with a federal spirit That, we failed to do Neither did we increase medical facilities. So, we were kept hanging in this state and hence, we have become world's number 1 in number of daily corona cases.

There has been a rapid rise in corona cases. The point to be noted is that we were already tottering at a rate of 4% GDP before corona struck. In the months of January, February and March, we had already hit 4.2% and the growth for the next quarter was being forecast at 2% At this point, corona struck Very quickly, let us take a look at 10 points that explain why we are in a position like this today and we will try and tell you why this problem is not going to get solved anytime soon because we always assume that "all is well" During the time of Budget 2020, we were already witnessing the biggest shortfall in taxes in a decade.

We were already reeling under a tax shortfall as our economy wasn't really growing as per our target In July-September 2019, we had already slipped to a 6 year low. We could see a downfall coming. We were already shrinking by 2.1 lakh crore Then, the GST blow on top of that- It was supposed to be our "second independence!" Three years later, situations pertaining to GST were such that we were already grappling with lowest collections in about one and a half years GST was supposed to accumulate a massive collection.

In contrast, collection fell and the states were left begging for funds as per the deal And just like a friend who disappears after taking a loan, the centre could be seen stalling and delaying the payment of funds to the states and if you're a state in which the opposition is in power, then gone are your chances of getting any money!

Unemployment-It was clear in 2019 when NSSO(which has now been done away with) data revealed that unemployment was at a 45 year high. The government had questioned the veracity of the report. By the time this report was released, the elections were already over and the government had said that it would set everything alright But the report had already shown us that employment was falling, which meant that manufacturing was falling which in turn signalled that our economy was floundering Furthermore, the figure of 2018-19 was double the figure of last year Within one year, we had doubled our unemployment figure in 2018-19 now.

You can imagine what conditions would be like in 2019, 2020 and 2021 after the outbreak of corona Next, let us move to rural economy. Tall claims of our rural economy turning saviour were made Farm income growth had slumped to a 14 year low in December 2018 Having already declined in 2018, we were trying to recover from it and this is why a slight increase is seen in the farm income subsequently. All this- while we were told that our farmers' income would double by 2022. How that will be done is yet to be seen.

A deflation was already visible in our rural economy 2016 onward On top of that, we had already lost 11 million jobs in our rural economy. These problems were already rearing their heads and so that is why economists, in a very interesting article, were talking about how a "cold wave" was hitting Indian economy in 2019 Viewed broadly in 5 points, our GDP growth had crashed by more than 2% within the span of one year Our Index of Industrial Production (IIP) was growing at minus 4.3% Unemployment, as I already told you, was at its 45 year high Since then, the spike of unemployment has been growing consistently And now the government doesn't even give us the data so that we can know Consumer confidence is extremely important People buy things out of their pockets as well as buy things on EMI if they are convinced that they would get money in the future But if they lack the confidence about the durability of their jobs, they would resist from spending Consumer confidence had already fallen to an 8 year low even before the corona pandemic and the business sentiments- of taking loans, setting up factories, advertising- had dipped to the 2008 levels and a financial crisis had struck in 2008.

The economy was already in shambles Now, why am I saying that this problem is not going anywhere soon? It is not that once corona ends, we would be back to our double digit growth rate from the minus 24% today That will not happen because there are no investments in our country. No matter how much you harp about Make in India, Take in India, Build in India and Atmnirbhar Bharat, investments are not happening in our country Since, the earlier investments have stopped now the debts of the people are rising And when this moratorium on EMI ends, and when banks begin to ask for their money back, the economic crisis will aggravate in the next three months.

Our NPAs are estimated to rise to 20 trillion from 10 trillion. The banking system is in for a lot of pressure in the next three months And then there is the problem of our shrewd politics. Politics should be shrewd and that is how it is done in India as well- there is no issue in that The problem crops us when shrewd politics gives people the confidence of being shrewd economists as well and then politics begins to be employed everywhere- which creates a problem. When the economy lies in ruins and China is attacking you, you indulge in politics of "Local par Vocal" and "Boycott China" Introspection on why China grew to be so powerful while we stagnated is not being done.

We do not question why our domestic manufacturing is unable to compete with that of China. We do not question whether "ease of doing business in India" is actually effective? Do we honestly take feedback from businessmen on whether they have an uninterrupted supply of electricity or whether they are asked for bribes and what areas they face problem in? No, We are satisfied with our better rankings in world ease of doing business by the World Bank But now, the World Bank has put a pause on world ease of doing business rankings because it turned out to be a hyperbole Now, what are we going to do and what are we going to tell the world? because the world is aware that it is difficult to conduct business in India and there is another major reason for that - Tax Terrorism, which affects both the big and the small businessmen Big businessmen have said that they are unable to carry out their businesses as they are randomly raided by authorities like CBCD and EID and their tax books are looked into It could happen to anyone- even you or me.

Big businessmen have said that Tax terrorism has to end The government has also more or less conceded but whether the terrorism has stopped or not will be told to you personally by the businessmen The 9th point is extremely interesting You could wonder how "social unrest" is related to all this. It is- When a company invests billions of dollars in India, it would want to know what kind of a country it is investing in and how the atmosphere there is- not the air quality- but the religious atmosphere and whether social unrest, tensions and freedom of speech exist or not We might conceal all of these things here But the problem is that be it the issue of Kashmir, or the issue of freedom of speech or the issue of Prashant Bhushan or the issue of JNU or the issue of police action, the entire world is reading about it.

You will understand how much is being written about religious violence in India if you look through some foreign papers But we assume that all is well and that the world considers us to be a superpower This is why no one is ready to invest here The last point I'd like to mention as to why we are facing so many problems is because we do not admit our mistakes. We will never admit that ease of doing business was a hyperbole We will never admit that the world is not investing in us because our Make in India policy has failed Instead, we repackage it as "Atmnirbhar Bharat- making for the world" Until we admit that we are officially in a phase of recession, and that our economy is floundering and that we need not focus on other problems of denial and sending people to Pakistan and that we need to focus our energies on this problem alone- not getting distracted by things like Bhoomi poojans and concentrate only on economic rebuilding- Until then, our nation will not improve And so I request you that now onward, if you watch the TV and consume news then do watch things about our country, about recession, and curtail watchtime on issues like that of Rhea because this problem is set to hit us hard If this economic recession continues, we will soon join the migrants on the road And so we swiftly made this episode to tell you the problem is massive and grave and that you will need to plan your finances carefully or else difficult times lie ahead. There's atleast no debate on the deplorable economic situation and this is why you will have to manage your own economic situation.

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