Friday February 28, 2020
Home Business finance India Require...

India Requires Some Bold Moves to Uplift its Economy

Tough economic times call for bold and brave moves

0
//
Economy
In the past quarter century, India's GDP has registered a nearly 10-fold increase and its population has grown more than 40 per cent, but the country's infrastructure has not kept pace with the growth of the Economy. Pixabay

BY FRANK F. ISLAM

Only six months after Prime Minister Narendra Modi won his re-election with a resounding mandate, the economic outlook in the country looks somewhat bleak. The overall state of the economy was not a primary focal point during the recent Lok Sabha election. Still, it was no secret in the run-up to the polls that sectors such as real estate, manufacturing, banking and finance were troubled. Nevertheless, at the beginning of Modi’s second term, many hoped that the Prime Minister, voted back to power for another five years in the largest democratic exercise in history, would take some bold moves to improve the countrys economic conditions. However, that hasnt happened to date. As a result, the worlds fifth-largest economy faces strong headwinds that it hasnt seen since the early 1990s.

In the past few months, more core industries have joined the list of troubled sectors. Earlier this month, it was revealed that two of the largest telecom operators in the country, Bharti Airtel and Vodafone Idea, had suffered a combined loss of $10 billion in the preceding quarter. This casts a shadow over India’s entire telecommunication sector — the second largest in the world. Three forecasters – State Bank of India, Nomura Holdings and Capital Economics – had lowered their predictions for the last quarter of this year to below 5 per cent. This would mean that the corporate tax cut announced by Finance Minister Nirmala Sitharaman — the government’s boldest move to steady the economy in the past several years — has had little or no impact. It will dampen public sentiment which is critical to the current and future wellbeing of the entire Indian economy. Available data points suggest that sentiment has already begun to falter.

There has been a slowdown in consumption, with rural consumption decreasing by 8.8 per cent, a 40-year low. And, growth has also slowed in the so-called “fast-moving consumer goods” sector for four consecutive quarters, indicating that consumers are becoming more and more reluctant to spend their hard-earned money. This past week, former Prime Minister Manmohan Singh penned an op-ed titled “India’s economy is perched in a precarious state currently.” He writes, “Incomes are not growing. Household consumption is slowing. People are dipping into their savings to maintain similar levels of consumption. Headline GDP growth is accruing almost entirely to the creamy layer at the top.”

If these downturns continue’ the real danger for India will be that the overall economy might not pick up any time soon and real GDP could even continue to decline. Either circumstance would necessitate a major intervention from the Modi administration similar to one taken in the past.

Economy
The overall state of the economy was not a primary focal point during the recent Lok Sabha election. Still, it was no secret in the run-up to the polls that sectors such as real estate, manufacturing, banking and finance were troubled. Pixabay

In 1991, during a major economic crisis then-Prime Minister Narasimha Rao took moves to change the course of the Indian economy by launching major market reforms. That was perhaps the most significant domestic policy decision taken by any government in an independent India.

The time is now ripe for a big and bold move from the Modi administration. The Prime Minister has proved that he is capable of bold moves and big-thinking. Moves such as demonetization and abrogation of Article 370 which removed special privileges to the former state of Jammu and Kashmir demonstrate that on the political front.

But on the economic front, there has not been anything quite that dramatic. Implementation of the Goods and Services Tax (GST) has been touted as a big-ticket item. But the GST was actually crafted by the previous United Progressive Alliance government, led by Prime Minister Singh.

The current crisis provides the Modi government with a great opportunity to kick-start Economic Reforms 2.0. (Economic Reforms 1.0 being Singh’s liberalization of the economy nearly three decades ago.) An economic reforms package could reshape and remodel the Indian economy and the reforms package should include upgrading the country’s infrastructure, setting up and promoting green industries, increased use of artificial intelligence, improving the quality of education, and significant jobs creation.

In the past quarter century, India’s GDP has registered a nearly 10-fold increase and its population has grown more than 40 per cent, but the country’s infrastructure has not kept pace with the growth. The mass migration of people from rural areas to cities has led to unbridled and unplanned expansion of urban areas and has put an unbearable burden on the urban infrastructure. As a result, town and city administrations have been unable to keep the urban areas clean and provide their residents clean water.

Rupee
If these downturns continue’ the real danger for India will be that the overall economy might not pick up any time soon and real GDP could even continue to decline. Pixabay

Finally, there is the issue of pollution. In 2018, according to the World Health Organization, nine of the ten most polluted cities in the world were in India. This sad and sorry condition must be addressed as part of a reforms package not only for the health of the economy but also for the health of all Indian citizens.

ALSO READ: This Latest Bug in WhatsApp Leads to Group Chat Trash and Deletion of Chat History Forever

In conclusion, tough economic times call for bold and brave moves. By taking the actions outlined herein, the Modi administration could right India’s economic ship. More importantly, it could put the framework in place for a 21st century Indian economy that benefits all citizens. Because of his unrivalled and unmatched popularity and proven track record in select areas, the Prime Minister has the potential to sell an economic reforms package that will position India for success in the short term and for the remainder of this century and centuries to come.

(Frank F. Islam is an entrepreneur, thought and civic leader based in Washington, DC. The views expressed here are personal) (IANS)

Next Story

Lenovo Retains its Dominance Over Tablet Market in India With 37% Market Share

This, in turn, implies the chances for a potential dent in tablet shipments in Q2 2020 of upto 6-8 per cent, according to the projections by CMR

0
Lenovo
However, among the top five brands, only Lenovo and Apple registered growth in 2019. While Lenovo registered 28.1 per cent year-over-year growth in 2019, Apple grew 12.3 per cent year-over-year. Wikimedia Commons

While the India tablet market declined 18 per cent in 2019 compared to a year ago, Lenovo has retained its dominance for the 10th consecutive quarter, grabbing 37 per cent market share in 2019, a report from CyberMedia Research (CMR) said on Thursday.

In terms of share in the India tablet market in 2019, Samsung came second with 16.7 per cent share, followed by iBall (13.9 per cent), Apple (12.4 per cent) and Datawind (5.4 per cent), said the report titled “Tablet PC Market Report Review for 4Q CY2019”

However, among the top five brands, only Lenovo and Apple registered growth in 2019. While Lenovo registered 28.1 per cent year-over-year growth in 2019, Apple grew 12.3 per cent year-over-year.

“During the course of 2019, the average sales value (ASV) for tablets in India increased, indicating a latent demand from enterprise players for variants with higher-end specifications. While Lenovo grew 28 per cent YoY in 2019, all other tablet brands saw their market share erode, with the notable exception of Apple,” Kanika Jain, Manager, Client Device Research, Industry Intelligence Group (IIG), CMR, said in a statement.

While the tablet market declined 18 per cent YoY, 4G Tablets grew sequentially by 22 per cent year-over-year, said the report.

As per the report, shipments of tablets with 6-7 inch displays constituted 39 per cent of the overall shipments in the India market. On the other hand, tablets with 10-inch and above displays contributed to 35 per cent of the shipments. Lenovo continued to show innovation with launch of E, M, P & V series tablets. Its M10 (HD & FHD) series garnered 16 per cent market share.

Samsung launched several tablets in 2019, including the Tab A 10.1, Tab A8.0, Tab S5e & S6. However, Samsung’s tablet shipments declined by 24 per cent year-over-year. Across all the tablet launches from Samsung, the Tab A 10.1 was the most successful, accounting for a massive 32 per cent share across the Samsung tablet portfolio.

iBall regained the third position for 2019, but declined 17 per cent year-over-year. Apple’s newly launched iPad 7, Air 2019 and Mini 2019 series helped it to register a year-over-year growth of 12 per cent during the year. In 2020, the tablet market is likely to start on a slower note, according to CMR.

Given that Chinese original equipment manufacturers (OEMs) control 40 per cent of the Indian tablet market, the reliance on China would see a negative impact on overall tablet shipments.

Lenovo
While the India tablet market declined 18 per cent in 2019 compared to a year ago, Lenovo has retained its dominance for the 10th consecutive quarter, grabbing 37 per cent market share in 2019. Wikimedia Commons

Though OEMs typically stock tablet inventories to tide over the Chinese New Year holidays, the coronavirus outbreak-caused disruption has led to an extended closure.

This, in turn, implies the chances for a potential dent in tablet shipments in Q2 2020 of upto 6-8 per cent, according to the projections by CMR.

ALSO READ: Astronomers Discover “Mini-Moon” Which is Temporarily Orbiting The Earth

“Traditionally, Q1 has been a slow quarter for the tablet market in India owing to the Chinese New Year holidays. However, with the coronavirus outbreak impacting manufacturing supply chain, we are, in effect, looking at an unexpected situation, wherein we believe, tablet shipments would see a further dip towards end of Q1, and more realistically in Q2 2020,” said Prabhu Ram, Head-Industry Intelligence Group, CMR. (IANS)