First it was the officially confirmed minus 23.9 % GDP contraction in April-June quarter of the current 2020-21 FY that that unnerved the entire economic think tank of the country. This was followed by RBI’s admission which came last week that the economy will contract by 9.5% taking into account the whole of the current FY. And the World Economic Outlook October 2020 report prepared by the IMF release on Tuesday paints a further grim picture since it warns that it’s going to be more worse than the RBI projection- a massive minus 10.3 % contraction. Distressing news about the Indian economy has become quite frequent these days and as such don’t elicit much perplexity. But this particular report has caused much discomfort as it has been found that the country which is chasing an officially declared dream of becoming a 5 trillion USD economy by 2024 is set to lag behind Bangladesh, an acknowledged poor nation.

From the comparative analysis that has been a major takeaway from the report, the sombre prediction is that India is on the verge of dropping below Bangladesh in terms of per capita GDP in the current FY in dollar terms and at current prices. This is since the per capita GDP of Bangladesh is expected to grow at 4% to touch $1,888 and in extreme contrast, for India it is set to nosedive to 10.5% to touch a new nadir of $1,877, the lowest in last four years. It’s relevant to take into account that the IMF has attributed the causes of this bleak scenario to the lockdown rolled out since March 25 last. While it’s certain that the lockdown is one of the major causes, it will be incorrect to conveniently single it out as the only cause. There certainly are reasons that can’t be categorised as ‘Act(s) of God’. 

The grey areas that need immediate mending are private consumption and investment, the two principal pillars based on which economic growth is achieved and sustained. Figures will corroborate how badly the duo had weakened right from the days much earlier than the pandemic’s onset. And the pandemic-induced lockdown was perhaps the final nail in the coffin- during Quarter 1, private consumption accounting for 59% of India’s GDP declined by 27%, while investments by private businesses fell to almost half by 47%. The results are visible everywhere- unprecedented unemployment and those at the bottom of the economic pyramid are on the threshold of more darker days.

It’s time to make some serious course correction. But, for the moment let’s stop dreaming about a 5 trillion dollar economy. Better to try emulate Bangladesh’s feat first.

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Kenter Joya Riba

(Managing Editor)
      She is a graduate in Science with post graduation in Sociology from University of Pune. She has been in the media industry for nearly a decade. Before turning to print business, she has been associated with radio and television.
Email: kenterjoyaz@easternsentinel.in / editoreasternsentinel@gmail.com
Phone: 0360-2212313

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