Reasons of Indian Economy Debacle

Pakistan Economy situations are indeed disturbing, but the Indian Economy is passing through a
sluggish economic growth. And Modi’s government has finally begun to admit the problem.
This ongoing economic slow down in the Indian Economy is quite clear since 2016. Moreover,
the Indian GDP growth has fallen to 5 percent in the April-June quarter, from 8 percent. This fall
in GDP growth is no doubt sudden, shocking as well as dramatic. Till now, while only the
businesses/business persons were showing concerns about the slow-down in economic growth.
But now it becomes a reality for the people of India.

People are worried about the wrong things going around them. Most importantly, they are
concerned that is this bottom or the beginning of the slow-down in economic growth.

Causes of Economic Slowdown in India

The only one root cause of Indian economic crisis is Prime Minister Narendra Modi. He cannot
escape responsibility for the economic slow-down in Indian caused by his acts of omission and
commission.

Modi, while contesting in the elections of 2014, has promised that good days will come and he
will work for the growth of the economy. But he is complete fails in it. 
India is facing an enormous economic crisis due to the poor leadership of Mr. Modi. Here we are
going to mention some of Modi’s acts of omission and commission that are directly responsible
for the economic slow-down in India.

Tricks as Policies

Mr. Modi has launched many plans in his tenure. He has started one big project after another. It
would be nothing wrong if these plans were the beginning of a revolution. But it’s a bitter reality
that nothing has come out from these launchings. 
Most of his top launched plans are:
Skill India
Make in India
Startup India
Digital India
Stand up India and many like these. But none of the plan has brought any revolution that he has
promised.

The launch of all these plans was only to trick the people. He has gimmick the audience by
terming these policies as the big plans to bring great revolutions in India.

Demonetizations

Modi government, instead of doing what was needed, has enforced economic dishonesty over 1.3
billion people. This plan of Modi to finish the black economy overnight has brought big disasters
in Indian Economy. This Demonetization disrupted the age-old economic system, has led to the
loss of incomes as well as jobs.

Next, this Demonetization has also shown bad results on small and medium businesses. In other
words, these day SMEs are operating on a cash basis, and this cash crunch has left these
businesses to be dry and high.
Such acts of Mr. Modi have scared investors about policy uncertainty in India. No one knows
when PM Narendra Modi will come on the TV and change everything in just one sitting!

Criticism of Business

PM Narendra Modi along with demonetization, he supports the culture of defaming business.
Big businesses and their holders were being painted as biggest corrupt and crooks in India and
Modi, do support such claims. 
It is true that everyone, including businesspeople, managed to convert their black money into
white thanks to demonetizations. But the criticism on businesses for political gains further slow-
down the investment ratio in businesses.

Rollout of GST

No one will defend demonetization, but it is impossible to deny that the implementation of the
GST on a nationwide basis has led to the economic slow-down in India. 
The Goods and Service Tax was no doubt a good idea in comparison to demonetization. But if
you want to check how good ideas turn into a bad, take the example of Modi‘s government. He
defined it as a good and simple tax, but it is not. Indeed, this GST has hampered the small
businesses and forces them to withhold inventory until they migrate to GST Network. This GST
was launched without analyzing its outcomes. The rules and regulation of this GST were
changed again and again with thinking that chartered accountants are super-computers.

No Work on NBFC crisis

In spite of facing banking NPA crisis, the Modi government had done no work over it until these
crises hit non-banking finance institutions. Demonetization is also a big reason for these crises.
Banks were flush with funds from demonetizations. They were unwilling to loan corporates, and
same corporates were reluctant to borrow. Further, Banks stepped up their exposure to NBFCs.
But thanks to the slow-down in the real estate as now NBFC’S see a rise in bad loads. This, in
return, is causing bad for automobiles sector.

Good Politics with Bad Economics

Modi is doing well with politics but in return turns into lousy economics. He is unable to put
money in the hands of rural India with his policies. Even the government fails with a small
increase in minimum support prices or NREGS wages. 
Keeping the low inflations helps Narendra Modi to win elections. But this victory comes at the
cost of reduced purchasing power and weak demand. Now the people of India are not saving and
nor spending because they are not earning enough for it.

Appreciating Bureaucrats over Economists

The biggest flaw of Modi’s government is the appreciation of bureaucrats over economists. The
crisis in the Indian economy comes from his 
Much of Modi’s poor leadership of the Indian economy comes from his arrogance for experts
and economists.

Right-wing economists like Arvind Panagariya as well as inconvenient liberals like Raghuram
Rajan both fail to work with Modi. He perhaps thinks that he is the top economist and knows
better than anyone else.

We can define this condition as “Harvard versus hard work.”

Modi believes that bureaucrats are the hard-working yes man, that’s why he relies on them. For
this, he has also appointed one of the bureaucrats as the governor of the Reserve Bank of India.
And the results of this hiring is a complicated GST, and many foolish ideas and taxes.

Modi Government & Tax Terrorism

Modi’s government, instead of reforming tax laws to make them simpler and relaxing tax rates
has gained popularity for “tax terrorism.” No doubt, he is working with a mindset of Indira
Gandhi, and he would be proud of Narendra Modi. 
Facing the fiscal deficit constraints and revenue shortfall, the Modi’s government is trying to
extract tax out of an economy that results in its slow-down. That results in tax terrorism.

Overstate Data

Modi government, just like the past, is putting their political interests above national interest.
That’s why the government is exaggerating the data. The best example for this is the claim that
the Indian economy grew at 7.1 percent in the demonetization year. 
Even, the former chief economic advisor of Narendra Modi government says that about three
percentage points overvalue GDP.

Indifferent Budget by Modi’s Government

The 4th New budget in July by NDA did nothing to improve the economic growth in India. The
government has imposed new taxes instead of tax incentives. Now the government is the biggest
reason for the economic crisis in India. 
However, the bereft of both ideas and ambition is clear, but still, their propaganda can keep
making them win elections anyway. And Modi wants nothing else than the seat of Prime
Minister!