I would hesitate to place the economy on farmers over economists. Farming might be doing a bit better but their contribution to the Indian economy is less than 15% and decreasing. July has to be better than May considering that quarter was the worst in India’s recorded industry. That by itself is again not a big deal only that July was better than our worst quarter on record.
Things take time to change and planning to make that happen. We have been always bad at planning as a country. We may change but I do not see big changes happening - in fact many things according to economists (Nobel Prize winning ones) going from bad to worse. We can ignore them at our own peril I suppose.
I am under no illusion that the second most populous country in the world has been average to less than average throughout it’s independent history. A per capita income of $ 2100 puts us at nearly the bottom of most measures countries.
You have to compare India with the peer group, except some 3-4 middle-east countries, Iran, Iraq and Gulf states etc. we are by far the worst performers in the whole of Asia. Definitely the worst east of Iran by a big margin. The worst in south asia, east asia, south-east asia. Beaten hands down by all our neighbours. We are still not under control and winter is due in a month’s time for the max population up north.
Sorting on the 'Deaths/million population" in descending order you get India at #78, top 1/3rd of the list of total 215 places. But yes, curve looks to be flattening in past week.
First of all we should move on from connecting Pakistan with everything. This is more regressive than progressive. Any opinion should be discussed and analysed before dismissing it based on prejudice.
Agriculture has just 13% contribution to GDP.
Of course it will be… Its a low base effect… As Vivek Kaul wrote our GDP may grow 30% in Q1 FY21. But we will still be catching up when compared to last year GDP in absolute numbers.
One need to remember that GDP has been falling for 8 quarters even before corona hit us. Most os us think that economy was hit just because of corona, but economist look at the data beyond corona. It seems more structural than cyclical at least so far.
Once the moratorium on Mudra loans are removed there will be avalanche of NPAs… Please note that this moratorium is different from the one thats was given after corona. Mudra loan moratorium is running longer than that… If I remember correctly it is from 2019.
Having said that if economy recovers well and economist/journalist are failed to realise, who else would be more happy than us. But its time to be cautious and keep a vigil.
Discl: invested in the market but keeping an eye on macro developments
Agree with your views…
Even before the Black swan event, the GDP is continuously falling for the last 9 quarters…
The main reason is Private consumption is falling and since private consumption is falling , business investments are not taking place. These two factors account for almost 80% of GDP… If there is no demand for the goods , so industries think why invest more to produce goods ??
The Govt strategy to revive the economy
(perhaps based on recommendation of a new class of Economists /advisors to the Govt ) is to put all the money on the hands of rural poor, farmers and Govt spends in a dozen of Social welfare schemes so that these Rural poor will spend money to revive consumption. The govt and the economist / advisors thought If the money is put in hands of salary class and middle class people in terms of say giving income tax concession…they would not spend and in turn these class of people would tend to save…and the consumption may not get revived .
So the Govt strategy which started since last 2 years seems to have given no result in reviving private consumption …though the Govt may be happy with their supporting/ feeding the rural poor/farmers/ Social welfare schemes…
Not sure how much Govt Has really spent on Rural poor/ farmers since last 2 yrs and where the money is going…even FMCG consumption also not showing any substantial growth for the last 7-8 quarters.
