Taking the first step

When Union Finance Minister Nirmala Sitharaman unveiled a book on global finance, and said it suggests solution for challenges that the world and Indian economy is currently facing, it gives away a necessary aspect that recognising and acknowledging a challenge is the very first step to addressing it. The book titled 'The Rise of Finance: Causes, Consequences and Cure' is co-authored by V Anantha Nageswaran and Gulzar Natarajan. The timing of such an event particularly stands out as India grapples to find ways to nurse its ailing economy back to health. India's economic growth has slowed down to an over six-year low of 5 per cent in the first quarter that ended in June this fiscal. Diminishing consumer demand and private investment have been the main causes of concern among other things in a deteriorating global environment. Consequently, several global agencies have cut India's GDP growth by various degrees for 2019-20. Althought the government has announced a slew of measures to address the crisis and is working in this direction, Indian Nobel laureate in Economics this year, Abhijit Banerjee has a clearer vision of how to set right the Indian economy lays a roadmap for it. He is of the opinion that the Indian situation resembles a Keynesian downspin meaning that there's not enough demand. So an obvious solution would be to enable cash flow in the economy so as to boost demand. The extensive steps being taken by the government which includes cut in corporate tax rate, capital infusion into public sector banks, setting up a Rs 25,000 crore fund to boost realty sector, etc., will boost the economy and likely spur it into a speedier growth.