India’s GDP crash to -23.9%

India’s GDP crash to -23.9%

Introduction To India’s current GDP 1st Quarter of 2020-21

Ministry of Statistics and Programme Implementation showed India’s GDP crash to -23.9%. Why India’s GDP crash in such contract of 23.9%. Which is lowest in several decades. Because of many reason, government has failed to implement strong economy. Following are given below.

Major Causes of Contract GDP of India

DEMONETIZATION

Demonitization (Notebandi) : After November 8, 2016 onward due to Demonetization Notebandi, business and banking system in India has been shaken. The implementation of demonetization was the biggest failure. Where many Bank staff and ordinary people have to lost there life. Many industry has been crash there after.

a) India sets major business insolvency due to demonetization. Many organized and non organized sector employees have lost there jobs during this period.

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b) Many people has lost there faith in banking system. People were unable to withdraw there own money during their emergency. Lead to completely broken there trust in bank. Now a days no body are interested to keep there hard earned money into bank. Best example is PMC bank and Yes Bank tragedy. Which has adverse affect on peoples attitude.

c) Constant changes of RBI rules during Notebandi gave negative impacts on small and medium scale industries.

d) Demonetization affects direct foreign investment in India, which leads to major set back. Many foreign investor has withdraw the invested money on Indian economy.

e) Real estate and other construction industries hits badly. Real estate gives major boost to GDP growth. Because of demonetization, many real estate company has insolvent. Major fraud has been recorded in real estate industry were many investor money has stuck.

f) Agricultural sectors lost there favorable time of purchasing seeds and other equipment due to demonetization. Rural area has suffer hard time, because bank are not situated near by to them. For just Rs. 2000 they have to spent travelling cost, food etc. Farmer were worst hits due to lack of financial back up from banking sectors over their own money.

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GOODS AND SERVICE TAX

Goods and Service Tax : GST has implemented on 01st July 2017. India has not recovered from its wounds of demonetization. Which results into drastically impact on every individual. Because of its highest rate of tax as compare to other countries. Government has put taxation on basic needs of the people. Due to which many small and medium sector industries were hits badly.

a) Bad implementation of GST, leads to many confusion among financial institute like CA. The rules and regulation of GST was complicated. Due to which accountant are unable to cope up and understand GST system.

b) GST has been implemented on insurance sector. Where people are paying double tax, through GST and income tax. It was not one nation one tax as said. People were gradually failing to pay premium, due to increase in premium cost with GST amount. Insurance sector gives major boost to economy, through its contribution to India’s infrastructure building.

c) Constant change and update of GST and its portal leads to huge confusion among financial sectors. Till today GST is still updating frequently, which is not good for stable economy.

d) Due to heavy GST rates. Many small, medium industries went insolvent. Whereas Major industries are crawling to sustain there business. GST has also adversely impact on job markets.

UNPLANNED LOCKDOWN

The nation constantly suffer and unable to cope up economically. The last quarter of 2019-20 was recorded 3.2% GDP. Because of demonetization and GST. The unplanned lockdown, without any provision to control economy. Leads to major set back in Indian economy. India has failed in controlling Covid19 and GDP. Both are in its worst highest peak.

a) Unplanned lockdown in India has worst impact on economy, poor people and job market. Government were busy with Vande Bharat mission for people outside India. Whereas there was no mission for daily wager. The daily wager has to forcefully leave the city as they experience the running out of money. Implementation of Atmanirbhar Bharat, people has not option left other than to walk toward their hometown.

b) Job market completely crash in India due to lockdown of many industries permanently. Scarcity in government vacancies takes place from last 4 years. Many government job exam held, but without any result. Youth in this nation are fighting for their right to job.

c) Worst controlling during pandemic. With just Thali bajao, Diya jalao, we were fighting Covid19. Seems we already got victory over Coronavirus. Today India became world second highest Covid19 affected nation. And lowest contract GDP growth.