While the Modi government claims that the GDP has increased at 7% for this year, some leading economists and statisticians dispute this claim.
They allege that the norms followed for calculating GDP growth rate have been tweaked to suit the needs of the establishment and that actual GDP growth is far lesser as evidenced by increasing unemployment across the country.
If what the critics say is indeed right, then the Modi government has only itself to blame.
It’s foolhardy enterprise of demonetization destroyed the informal sector and is reflecting in the current GDP numbers which may have prompted government agencies to paint a far rosier picture.
And here’s the amusing (or sorry) statistic: currency in circulation today is more than what it was prior to demonetisation. So, what does this indicate? That people have money with them which they are no longer depositing in banks as they lost confidence in the latter.
Therefore, the banks are running short on money to lend to corporates which can boost economic activity.
The onus thus falls on the Reserve Bank once again to inject some much-needed liquidity into the system to boost economic activity. How does the RBI do that? By printing more money!
Such solutions cannot tackle the root of the problems. But the BJP will never admit that demonetization was a failure because no political party will own its blunders.
But demonetization did indeed serve one purpose: helping the BJP win the Uttar Pradesh Assembly polls by stripping the Opposition of cash. In that sense, demonetisation has fulfilled its objective.
What about the suffering of the common man? Well……..does anyone really give a damn?
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