The mismanagement of the Indian economy by the Modi Government, its genocide in Kashmir, and its anti minority/Muslimsfascist policies driven by the RSS/Hindutvaledviolation ridden agenda have caused India’s economic downturnas it has lost its economic growth (GDP)by more than 50 percent within the last few years.Furthermore, widespread anti CAA violent protests in India, and the recent unbridled killings of the Muslims and burning of their properties by the RSS Zealots in New Delhihave disturbed India’s internal stability, which has scared the domestic and foreign investors,and India’s economy is sliding towards recession.
The evidence of the Indian economy’s downturn,anda strong possibility that soon it will hit recession is being confirmed by the credible Indian and the world sources.As per the Economic Times, India, dated 1 December 2019, India’sGross Domestic Product (GDP) in the third quarter of the Year 2018-19 fell to 4.5 percent from 9.4 percent in the same quarter of the Year 2016-17.The IMF has projected India’s growth rate in 2020 atjust 4.8 percent.
In the words of former Governor of the Reserve Bank of India (RBI), Raghuram Rajan, there are signs of “deep malaise” in the Indian economy. As per the Asia Times, dated 26 December 2019, bad performance of the Indian corporate banking sector and corporate production/businessgiants with a heavy debt burden is another major cause of India’s worsening economic growth.
According to a recent McKinsey report, India Inc’s corporate debt (including bank loans) stands at 56 per cent of the gross domestic product (GDP). Metal, power, and telecoms account for 40% of the unserviceable debt. The government forced huge loans by the banks for the politically motivated development projects, have a pile of Non-Performing Assets(NPA) of more than $ 150 billion till end 2018, which is projected to rise to $200 billion by mid 2020.
Corporate India has some big names and brands like Tatas, Birlas, Ambanies and Mittals,who are allunder debt. India Today published a story on 15 March 2019 with the title, Anil Ambani: The Fall of a Billionaire, from being one of India’s star businessmen to a defaulter facing a jail term. Mukesh Ambani’s Reliance debt has risen to Rs 2.92 lakh crore. The oil-to-telecom conglomerate had an outstanding debt on March 31, 2019 equal to $ 40.4 billion.
Abu Dhabi’s Etihad Airways owned 24 % shares of Jet Airways and it had to struggle to sell it back to Indian State Bank in 2019, when Jet Airways collapsed, being under debt equal to $1.2 billion.The Arabian Business Magazine on 27th Jan 2020 reported that India has set in motion the privatization process of Air India and the buyer of Air India will inherit about $3.26 billion of debt.
The BBC reports of 2019 and 2020 point to a dismal picture of Steel Industry as well, where Tata Steel’s pre-tax losses were £371m in 2019 and India’s big car makers have announced production cuts as the car sales have dropped by 41%.
It is clear that the chances of Indian economy hitting the recession are more, than its early recovery, especially under the persisting Modi led BJP rule
Davinder Sharma’s report states a sorry picture of the Agriculture sector, where the farmers throwing potatoes and onions on the streets is a recurring phenomenon, as they are denied the rightfulprices for their commodities. As was reported by India Today on 21st Jun 2019,since 2014, thenational average of the reported farmers’ suicides every year is 16000 persons.
The Business Today on 17 Jan2020, highlighted the bad state of telecom sector, as the Indian Supreme Court quashed the review petition filed by Vodafone, Idea and Bharti Airtel (incumbents) on the AGR (adjusted gross revenues) dues, as they are unable to pay the liabilities of Rs 53,038.6 crore. The Reliance Telecom arm with the name of Reliance Jio also has liabilities worth $14 Billion.
As published in the Hindu, India, dated 6 March 2020, former Indian Prime Minister, Manmohan Singh writes in his article, ” Just in a few years, India has slid into a strife ridden majoritarian state in the economic despair. The impact of such social unrest (Like the one recently happened in New Delhi), will only exacerbate the economic slowdown, as investors will remain scared of the social disruptions and communal tensions. As a matter of fact, wilfully stoked communal tensions, and gross economic mismanagement is threatening to derail India’s economic progress and standing”.
In view of the above discussion, it is clear that the chances of Indian economy hitting the recession are more, than its early recovery, especially under the persisting Modi led BJP rule.Hence, the local and foreign investors will remain scared of investing in India. That is why,the foreign investors, including the Gulf countries, especially the KSA and UAE arerightly thinking to choose other countries for their investments rather than investing in India. Saudi ARAMCO and the UAE energy giant are also hesitant to invest in India in collaboration with Ambani’s Reliance energy, which is facing a near collapse situation.
The writer is a former Research Fellow of Islamabad Policy Research Institute (IPRI), Islamabad and Senior Research Fellow of Strategic Vision Institute (SVI), Islamabad