Economic slump: Modi govt re-arranging furniture when house is on fire -Subodh Varma

-Newsclick.in

Measures announced by the finance minister are mere concessions to industry lobbies and stock market, and don’t address lack of demand.

The raft of measures announced by India’s finance minister Nirmala Sitharaman for supposedly boosting a sinking economy are unlikely to rescue flagging economic growth and don’t even address the key problems of lack of purchasing power with the people and raging unemployment. It’s rearranging the furniture when the house is on fire.

Sitharaman’s announcements were welcomed by everybody from prime minister Narendra Modi, and home minister Amit Shah to party leaders, ministers, chief ministers and even ex-chief ministers of the ruling Bharatiya Janata Party. They were also welcomed by some of the automobile industry tycoons and share market players. Even the US-India Business Council praised it extravagantly.

The measures can be boiled down to: roll back of enhanced surcharge on foreign portfolio investors, lifting ban on government purchase of new cars, allowing BS-IV vehicles to ply till their registration time gets over, allowing an additional 15% depreciation rate for vehicles, infusing Rs.70,000 crore in banks and Rs.20,000 crore for housing finance companies through the National Housing Bank, completing all pending Goods and Services Tax refunds to MSMEs (medium, small and micro enterprises) in 30 days, removal of angel tax on start-ups, etc.

“The finance minister is simply trying to talk the economy out of the ongoing slowdown. It’s not going to work,” said Surajit Mazumdar, professor of economics at Delhi’s Jawaharlal Nehru University.

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Newsclick.in, 24 August, 2019, https://www.newsclick.in/Indian-Economy-Slowdown-Nirmala-Sitharaman-Modi-Government-Crisis?fbclid=IwAR0o_ctZcJ8Ca_Z5g1Rj3hZv6hj2zD4H03JsUDyXyIpGzhkt-FWsv77btpY

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