The economic growth in India suffers again as projected growth low again

India recently had celebrated the festivals of harvest in the form of Pongal, Makara Sankranti and Lohri in its different states in January’s second week. These festivities recently have been lavish as there have been high rates of growth.

However, it seems that the things have changed. The rate of growth for GDP was in between 7% and 8% for the last few years and was fastest among the economies in the world. However, in the last year, it has seen a marked deceleration as there was a slump in the growth rate to a level of 4.5 % in the third quarter of 2019 which was its slowest in as many as six years.

World Bank, IMF as well as OECD had all sounded the alarms in the month of October after the projection of growth rate had been trimmed to 6.1% for the year 2019-20 by the central bank of India, the RBI.

This was due to the sharp decline in the consumptions privately and the growth weakening in the services and industry. In spite of the numerous cuts in the rate of interest in the year 2019, the Bank had been forced to cut their forecast once again to a level of 5%.

Many factors have been contributing to the malaise of Indian economy.  When Narendra Modi and his party had been elected in the year 2014, it had inherited a weak sector of banking and finance which had been saddled by a lot of the bad debt. This made the lending a lot more difficult and had triggered the decline in the spending of the consumers and exports as well as the investment in business. Further the policies thereafter have not been working too well for the economy either.