The year 2019 was very volatile in terms of economy. This year, the slowdown in the world economy had an impact on the country's economic growth. Our economy has been in the limelight this year due to the slippery pace of GDP growth, steep decline in industrial production and an increase in retail inflation in the last 2 months of the year. According to analysts, this year saw pressure on the economy due to the impact of Global Slowdown and overhauling of the country's economy. Currently, slow growth has hit the target of making the country's economy $ 5 trillion in the next 5 years. Experts hope that from the second half of the next financial year, the pace of economic growth will be back on track and will help in achieving a sustainable growth rate. The government took a number of important measures, including a reduction in corporate tax, to get the sectors under pressure out of lethargy. What were the main events related to the country's economy this year and how the government continuously tried to handle the situation.
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According to experts, the effect of economy overhauling According to Brinda Jagirdar, former chief economist of SBI, in the last 5-6 years, the practice of investing loans from banks had become. There were also cases of divert investment. Due to this, bad loans of banks i.e. NPA (Non-Performing Asset) increased. The crisis escalated after the IL&FS crisis surfaced last year. This led to a shortage of cash with the banking sector and non-banking finance companies. They were not in a position to lend. This reduced cash flow and reduced both investment and demand. However, in the past few years, the government has taken measures to overhaul the economy, it will achieve sustainable growth rate in the coming years. According to him, all the measures of the government have brought transparency in the economy in the recent past. This has prevented corruption, money laundering. According to economists, banks have also benefited immensely from IBC.
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Slow GDP and rising inflation DK Joshi, chief economist at rating agency Crisil, said that this year's GDP has gone down and inflation has gone up. GDP growth rate has come down significantly. In that sense, this year has been very uneconomical. The condition of the economy has weakened further due to the ILFS crisis. The financial sector is called 'lifeblood'. He said that the recovery will begin with the financial sector recovering. Recovery will be very slow. Industrial production is currently negative, the import is negative. However, recovery seems to be occurring. The impact of the reduction in corporate tax will not be seen very soon.
Speed of GDP growth so far In the first quarter of the year i.e. January-March i.e. the fourth quarter of the financial year 2018-19, the GDP pace decreased to 5.8%. Earlier, in the last quarter of the financial year 2017-18, the pace of economic growth of the country was at a high level of 8.1%. From here, the pace of economic growth has been taking off every quarter. During the first quarter (April-June) of the current financial year, the pace of GDP growth came down to 5%. Thereafter, GDP growth slowed further to 4.5% in the September quarter. Thus the country's GDP growth fell to a low of more than 6 years.
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Automobile, banking, real estate under the most pressure The year was full of challenges for the automobile sector. The decline in vehicle sales during the entire year has brought a lot of pressure on auto sector companies and related industries. According to data from the Society of Indian Automobile Manufacturers, there was a 12% decrease in total domestic sales of vehicles in November this year. Earlier October saw a decrease of 12.76% in vehicle sales. In September, domestic sales recorded a steep decline of 22.41% and the highest fall of 23.55% in August. Vehicle sales declined by 18.71% in July, 12.34% in June, 8.62% in May and 15.93% in April. Due to this there were also reports of layoffs of employees by many companies. According to government data, the unemployment rate in the country reached the level of 45 years. With this, the banking and real estate sector saw the most pressure. During this period, there has been no significant improvement in the lending of banks.
Government took over Finance Minister Nirmala Sitharaman took the front to bring the country's economy back on track. The Finance Minister had given a big relief to companies by cutting corporate tax before 37th meeting of GST Council. It was seen as a masterstroke in terms of increasing investment. In addition, the government announced financial assistance to the realty sector. With this, it was announced to create a National Investment Infrastructure Fund with an amount of Rs 10,000 crore. Along with this, the financial support for the MSME sector was also announced by the government. Realizing the economic slowdown in the country, the Reserve Bank of India started cutting the repo rate from February itself. The central bank reduced the repo rate by 1.35% this year.
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