Rebooting Economy XXV: How a series of economic misadventures derailed India's growth story
This is Part I of two-part article revisiting critical economic decisions that eventually led to minus 23.9% growth in Q1 of FY21. Blaming exogenous factors (pandemic) or intense lockdown is merely an excuse to divert attention from government's ineptitude and thwart meaningful debate
- Sep 10, 2020,
- Updated Sep 11, 2020 5:18 PM IST
Why did India take a far bigger COVID-hit to its GDP than other major economies in the world? How and why did the fastest growing economy legitimately aspiring for higher growth and prosperity flounder, ending up in a big economic mess and robbing millions of aspirational Indians of their dream?
That growth had slowed down even before the pandemic hit and an untimely, unplanned and sudden lockdown delivered the knockout punch is known. That there have been many economic misadventures in the past six years that put a heavy cost is often lost sight of. Those misadventures deserve to be retold and reassessed to save India from a further encore.
The best way to begin this is to take a close look at the GDP growth ever since the incumbent government took charge. The graph below highlights some of the key misadventures that shocked the Indian economy.
It is not fully operational yet, tax refund claims are granted without verification, its IT backbone, GSTN is not fully operational and all filing requirements (GSTR-2 for inward supplies and GSTR-3 for summary of outward supplies not yet issued) and tax audit compliances (GSTR-9C) are not yet in place.
Like demonetisation, GST was brought in without preparation. It ended up damaging both unorganised and organised sector enterprises. Businesses also shifted from unorganised to organised sector, damaging further those who had suffered huge losses due to demonetisation a few months earlier.
Part II of the article will look at some other economic misadventures that derailed the Indian economy.
Why did India take a far bigger COVID-hit to its GDP than other major economies in the world? How and why did the fastest growing economy legitimately aspiring for higher growth and prosperity flounder, ending up in a big economic mess and robbing millions of aspirational Indians of their dream?
That growth had slowed down even before the pandemic hit and an untimely, unplanned and sudden lockdown delivered the knockout punch is known. That there have been many economic misadventures in the past six years that put a heavy cost is often lost sight of. Those misadventures deserve to be retold and reassessed to save India from a further encore.
The best way to begin this is to take a close look at the GDP growth ever since the incumbent government took charge. The graph below highlights some of the key misadventures that shocked the Indian economy.
It is not fully operational yet, tax refund claims are granted without verification, its IT backbone, GSTN is not fully operational and all filing requirements (GSTR-2 for inward supplies and GSTR-3 for summary of outward supplies not yet issued) and tax audit compliances (GSTR-9C) are not yet in place.
Like demonetisation, GST was brought in without preparation. It ended up damaging both unorganised and organised sector enterprises. Businesses also shifted from unorganised to organised sector, damaging further those who had suffered huge losses due to demonetisation a few months earlier.
Part II of the article will look at some other economic misadventures that derailed the Indian economy.