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Millennium Post

Solution required

Solution required

It must be considered very seriously what World Bank says about how severe the slowdown in India is and cuts GDP forecast to 6 per cent. Cutting India's growth projection by the most among South Asian nations on comes primarily because of a deceleration in domestic demand. India's gross domestic product growth is projected at 6 per cent in the fiscal year started on April 1, compared with 7.5 per cent forecast in April and 6.8 per cent recorded a year earlier. Growth is expected to gradually recover to 6.9 per cent in 2020-21 and to 7.2 per cent in the following year. As per the World Bank report, "In such a weak economic environment, structural issues surface and the weak financial sector is becoming a drag on growth." Reserve Bank of India had earlier downgraded its economic growth projection by the biggest cut in its forecast in at least five years to 6.1 per cent this year. GDP growth cooled for a fifth straight quarter to 5 per cent in the three months ended June, at the slowest pace since March 2013. A worrisome situation indeed, the fact that a fall in domestic demand has contributed to the crisis is actually but a symptom of the real problem. Boosting domestic demand is definitely a suitable way to mitigate the situation but it is the systematic methods to make that happen which will address the situation. As for the World Bank's cut in India's growth projection, a crucial aspect to come to light is that the impression an economy created on the global platform and the impact that has in turn on the domestic economy. The Indian leadership is known for his ability to strike a unique chord with other world leaders but the point to drive home is that for any foreign investment to flow in, the domestic economy must appear capable of absorbing it. The picture of an ailing domestic market is no encouragement for foreign investors. In any case, necessary interventions must be made to revive India's economic health so as to also have better standing globally.

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