Low wages and income inequality have led to a fall in demand. This situation cannot give rise to sustainable economic growth.Much has been written and said about the ongoing economic slowdown in the Indian Economy. What was being indirectly said about several economic indicators flashing warning signals for the last year or so, what has triggered the present criticism is the GDP (Gross Domestic Product) figures for the last quarter which came in at 5.7% and suddenly brought the issue into a full public glare.

The Effect of Demonetization

Demonetization can be said to have contributed too much of the slowdown as the Double Whammy of demand collapsing, and supply bottlenecks mean that there is a broad slowdown across the entire value chain of the demand and supply dynamics.Thus, what we have is a situation wherein cash has dried up leading to a slowdown in the economy.

The Big Corporates are as much to blame since they are drowning in debt that they accumulated during the Boom Years of the first decade of the 21st century.It is also a fact that this has contributed to a freeze on investment by industrial houses and corporates who are now paying down the debt or postponing debt repayments to ensure that their present cash flow is sufficient to remain in business.

Too Much Debt

Added to this is the fact that most Public Sector Banks are saddled with high NPAs or Non Performing Assets that have resulted in them tightening lending and instead, seeking deposits and otherwise repairing their balance sheets by making provisions for Bad Loans.Indeed, absent recapitalization of such banks by the government, one might very well see a vicious cycle wherein bad debts and demand collapse lead to no lending and no fresh investment in addition to any consumption.

Rollout of GST

The fact that the rollout of the GST or the Goods and Services Tax on a nationwide basis has led to the slowdown cannot be denied.Indeed, GST has hampered the small businesses more than Demonetization by forcing them to withhold inventory until they migrate to the GSTN or the GST Network and become compliant with the numerous rules and regulations that are part of this tax.It can be said that the implementation of GST is also flawed thereby exacerbating some of the factors that have contributed to the slowdown.

Loss of confidence in investments

Loss of confidence makes consumers stop buying and move into defensive mode. Once a critical mass moves toward the exit sign, panic sets in. Retail sales slow. Businesses run fewer employment ads, and the economy adds fewer jobs. Manufacturers cut back in reaction to falling orders—the unemployment rate rises. To restore confidence, the federal government and the central bank must step in.

Collapse in Private Consumption and Investment Freeze

What are the reasons for the present slowdown in the Indian Economy? To start with, private consumption has taken a beating due to Demonetization as consumers suddenly prefer to hoard cash or keep it in the bank instead of spending on consumer goods.Moreover, demand has also collapsed in the rural areas as the entire rural economy runs on cash and Demonetization led to the loss of jobs as well as incomes thereby squeezing the rural consumer who now prefers to wait and watch as well as postpone consumption except that of essential goods and services.

By: Ardhra George

I BA Economics

By Cindrella Stanly

India’s economic growth hit a six-year low of 5 per cent in the first quarter of the current fiscal. Finance Commission Chairman N K Singh said the current economic slowdown is episodic and expressed hope that sluggishness will not continue for long. The disruption in industries is not cyclical or because of economic slowdown. There is a structural shift in many industries because of technology or shift in consumer preferences. Automation is affecting jobs in both manufacturing and services, which displacement is also affecting the consumption cycleLow wages and income inequality have led to a fall in demand. This situation cannot give rise to sustainable economic grow.in my opinion,Also, high rates of GST, liquidity crisis in NBFCs, and shift in the behavioural pattern of the workforce due to the entry of young people has discouraged savings.

The Effect of Demonetization

Indeed, Demonetization can be said to have contributed too much of the slowdown as the Double Whammy of demand collapsing, and supply bottlenecks mean that there is a broad slowdown across the entire value chain of the demand and supply dynamics.

Thus, what we have is a situation wherein cash has dried up leading to a slowdown in the economy.

One must also take note of the fact that it is not only private consumption and small enterprises causing the slowdown.

Too Much Debt

Added to this is the fact that most Public Sector Banks are saddled with high NPAs or Non Performing Assets that have resulted in them tightening lending and instead, seeking deposits and otherwise repairing their balance sheets by making provisions for Bad Loans.

Global Slowdown

It is not these factors alone, and the most important factor is that there is also a global economic slowdown that is happening and given the fact that India is a net commodity exporter, there has been a slump in the volumes of exports.

Apart from that, the global slowdown has also been accompanied by a retreat of globalization which has resulted in FDI or Foreign Direct Investment being only in the areas of speculative finance and distressed assets purchases rather than into investments that help the Real Economy.

Thus, it can be said that ongoing global headwinds also have contributed to the slowdown

The Indian economy has huge potential, the current slowdown must be dealt with a bottom-up strategy, which may include boosting agriculture, food processing, tourism, MSME, automobiles and pharmaceuticals.

After the recession in 2008, the Indian Economy is again at downturn now. Well, the condition of Global Economy is also not different. IMF warned the world economy is increasingly vulnerable to impact of climate emergency. India being a developing market economy, the condition in global economy is definitely affecting it and the contraction of economy is supposed to be a rarity.

The latest annual report 2018-19 by RBI, confirmed that the Indian Economy hit a rough patch. GDP growth rate of the economy slipped to 5% in the first quarters of Financial year 20, which is the lowest in six years. Well, since the past decade this is the third time, economy is being close to a situation of recession.

India was the fastest growing major economy till last year. But now Phillipines and Indonesia grew at a faster rate than India, followed by Malaysia just behind it. IMF downgrade India’s growth rates. World Bank estimated India’s growth to be 5%, while UN estimated to be 5.7%. IMF suggested some indications for Global Growth decline. Those include the geopolitical tension between US and Iran, further worsening of relations between US and it’s trading partners and all. 


Slowdown of economy’s concern and perception affect consumer confidence and consumption. Some of the main reasons of the slowdown are given here.

1. Recent sharp fall in PFCE.  Private Financial Consumption Expenditure  (PFCE) in June quarter, increased to 3.1% compared to 7.2% in March quarter. Any fall in consumption expenditure would only escalate the situation of the crisis even more. This occurs because when consumption falls, the output and employment falls eventually leading to a more devasted situation to the crisis. The fall in PFCE reflect in lower household demand.
2. Slackening of investment Since the 1991 economic reform introduced by Manmohan Singh, investment perform a great role in the GDP. The investment’s contribution to growth fell by 6.2% during 2014-19, which is less than 2011-14.  The slackening of investment leads to lowering the level of infrastructure development. This can seriously damage the small business by causing hesitation for their emergence. The investment slackening forces the entrepreneurs from investing in Research and Development. 
3. US – China Trade war.   Trade war is  defines as an economic war between countries to impose extreme foreign policies So as to gain more control over their own economy. US and China, the two largest economies are in a race to become the superior economic power. They hold 24.3 and 15% economy of the world respectively. Out of the $3.1 trillion/year of US import, $540 billion worth of import is from China alone. other hand it’s export are only $2.5 trillion/year. To be more clear, China is growing on par with US and most of it’s growth can be pegged on the trade with the US.
4. Lack of saving one of the other problem faced by the economy of India is the lack of saving. The current youth generation is not interested about creating savings. The lack of saving create an issue for lack of money for investment too.
5. The high rate of GST, liquidity in NBFC and shift in behavioral pattern of workforce.  The domestic demand has slowed more sharply than expected amid stress in Non-Bank Financial Sector and decline in credit growth.

-by Aaisha Haries

This decade has witnessed one of India’s greatest economic slowdown. In the July-September quarter, the growth slipped to 4.5%, worsening the job prospects for millions of youth entering the workforce each year. The slowdown can only be reversed if both short-term and long-term reforms are undertaken. There was a sudden and dramatic fall in GDP growth. Till now, while only businesses were talking about the slowdown, it is now a reality for the country. People worry about how bad things are and is this bottom or the beginning of a slowdown. The speed and nature of the government and industry’s response are matters of debate and also whether these actions will turnaround things immediately, or not. And finding answers to these questions are of utmost importance because it affects the consumer consumption. It is not a sign of weakness and acceptance of any blame for acknowledging the problem. leadership in the corporate sector has failed to recognize the major transition taking place in their sector that has affected consumer demand. The Indian government along with its citizens are suffering. Even the government’s mismanagement is responsible for much of its slowdown, it has fallen victim to these blunders.

REASONS FOR THE ECONOMIC SLOWDOWN:

The main casualty: tax revenue. It is a trouble sign for India as taxation is a core part of the capabilities of any government, especially a greater worry for a poor country like India where state spending is key to lifting people out of poverty.

Tax to GDP: India has a long-standing problem of not collecting enough taxes given the size of its gross domestic product. Not only is it much lower than developed countries with comparable GDP sizes, it is below even comparable developing countries. India’s tax-to-GDP ration lags behind even Nepal.

Demonisation: Demonetisation can be said to have contributed too much of the slowdown and supply bottlenecks mean that there is a broad slowdown across the entire value chain of the demand and supply dynamics. What we have is the situation wherein cash has dried up leading to a slowdown in economy. The big corporates are as much to blame since they’re drowning in debt that they accumulated during the boom years of first decade of the 21st century.

Debt issues: Most public sector banks are saddled with high NPA or non performing assets that have resulted in them tightening and lending and instead seeking deposits and otherwise repairing their balance sheets by making provisions for bad loans. One might very well see a vicious cycle wherein bad debts and demand collapse lead to no lending and no fresh investments in addition to any concepts.

Goods and service tax(GST): GST on a nation wide basis has lead to the slowdown cannot be denied. GST has hampered small businesses more than demonetisation by forcing them to withhold inventory until they migrate to the GSTN or the GST network and become company for the numerous rules and regulations that are part of this tax.

By REBECCA GIGI

Slews of emerging technologies are reshaping our lives and are bringing major changes in our society, possibly at a rate of change never seen before in history. Technologies that were once theorized as visions of a future society, have now become a part of daily life. Cheap computing power and access to large data sets made it easier to replace jobs done by humans and it is seen that machines are doing better jobs than humans.The role technology has played in our lives is so vital that we rely on it for doing anything. Be it ordering food from a shop you’re far away or booking a seat for a movie which is due two days or so. The advancement of technology has been of a great significance by the founding of two major domains, Internet Of Things (IOT) and most importantly, Artificial Intelligence ( AI). Should AI increase productivity growth, then this will increase economic growth and provide new opportunities for international trade. One main factor is that the linkage of AI takes time for society to incorporate the advancement in technology with economic demands. AI will also affect the type and quality of economic growth, with international trade implications. AI is already having major impact on the global development and management of several value chains. It can be used to determine and improve the predictions of the future trends in the growth of economy by meeting people’s demands and manage risks along the supply chain. While some argue that AI will remove jobs from qualified professionals, it has the reverse effect. Companies who utilize AI  do so with the idea  to automate jobs, making it more feasible to use man power efficiently for the work that cannot be done by machine.  

The progresses in Artificial Intelligence are already impacting our economy. As these technologies move out of the research labs and innovation hubs, our country is promisingly poised to take advantage of this gathering storm of opportunity. Our ecosystem of startups are in a race to apply these technologies and data sets to solve unique Indian problems like technologies, agriculture, urban transport, etc.

By helping companies transform their the customer experience, launching digital products and services and optimizing supply chains, the Artificial Intelligence is catalyzing transformation in every industry. Though the jobs that depend on manual labor may shift to machines, the design of these system and their upkeeps has the potential to create new jobs. There’s also a a chance for these machines to improve the capacity of the manual workforce, allowing them to accomplish tasks that would otherwise be impossible.

The devices of Internet Of Things may affect the economy in many ways. With technologies that made communication easier and quicker, there can be great decrease in wastage of perishable goods, materials lost to manufacturing issues, energy consumption, etc., resulting in cost reduction. It also helps to make better business decisions. Connected mobile devices have made it easier for small businesses and individuals to make payment without expensive registers or card processing equipment. Homes, buildings and smart cities connected by the IoT can help in cutting waste, green house emissions, pollutants, etc.

By Melgreeta dcruz

Just as students grow up around the world have everyday, technology also finds a way to grow and become better and better. It was only 20 years ago when we didn’t even have advance computers or even the thought of creating smart phone.20 years ago,there was hardly any information on internet. It was very difficult for common people to get information because only very few owned anything like a computer.We are in the century where everything is controlled by technology. Everywhere we turn something is touch screen, high tech or smart technology. So how does all this technology impact the social benefits of those around us?

Economically, the new age technologies has also helped a whole lot. Industrial revolution is one of the impacts of digital age in the economic life of societies today because the use of new technologies and inventions of machines helps towards increasing production of goods and services and also delivering those goods to the appropriate place when needed. Also, without the world wide web(www) for example, globalization and outsourcing would not be nearly as feasible as they are today. The digital revolution radically changed the way individuals and companies interact. Small regional companies were suddenly given access to much larger markets. Concepts such as on-demand services, manufacturing and rapidly dropping technology costs, made possible innovations in all aspects of industry and everyday life.

Artificial Intelligence refers to the intelligence of machines. This is in contrast to the natural intelligence of humans and animals. With Artificial Intelligence, machines perform functions such as learning, planning, reasoning and problem-solving.Most noteworthy, Artificial Intelligence is the simulation of human intelligence by machines. It is probably the fastest-growing development in the World of technology and Innovation. Furthermore, many experts believe AI could solve major challenges and crisis situations.

– AFREEN SHYAM

Artificial intelligence plays an increasingly important role in our lives and economy and is already having an impact on our world in many different ways.AI is seen by many as an engine of productivity and economic growth. It can increase the efficiency with which things are done and vastly improve the decision-making process by analysing large amounts of data. It can also spawn the creation of new products and services, markets and industries, thereby boosting consumer demand and generating new revenue streams.
However, AI may also have a highly disruptive effect on the economy and society. Some warn that it could lead to the creation of super firms – hubs of wealth and knowledge – that could have detrimental effects on the wider economy. It may also widen the gap between developed and developing countries, and boost the need for workers with certain skills while rendering others redundant; this latter trend could have far-reaching consequences for the labour market. Experts also warn of its potential to increase inequality, push down wages and shrink the tax base.
While these concerns remain valid, there is no consensus on whether and to what extent the related risks will materialise. They are not a given, and carefully designed policy would be able to foster the development of AI while keeping the negative effects in check. The EU has a potential to improve its standing in global competition and direct AI onto a path that benefits its economy and citizens. In order to achieve this, it first needs to agree a common strategy that would utilise its strengths and enable the pooling of Member States’ resources in the most effective way.

Is it a boon or a bane for human existence and economy, is a relevant question.The very idea to create artificial intelligence is to make the lives of humans easier. Researchers of artificial intelligence want to bring in the emotional quotient to the machines along with the general intelligence.

Briefing about the advantages and disadvantages of artificial intelligence(AI)

AI Advantages	AI Disadvantages
Error Reduction	High Cost
Difficult Exploration	No Replicating Humans
Daily Application	No Improvement with Experience
Digital Assistants	No Original Creativity
Repetitive Jobs	Unemployment
Medical Applications
No Breaks

Advantages:AI would have a low error rate compared to humans, if coded properly. They would have incredible precision, accuracy, and speed.They won’t be affected by hostile environments, thus able to complete dangerous tasks, explore in space, and endure problems that would injure or kill us.This can even mean mining and digging fuels that would otherwise be hostile for humans.Replace humans in repetitive, tedious tasks and in many laborious places of work.Predict what a user will type, ask, search, and do. They can easily act as assistants and can recommend or direct various actions.

Disadvantages:Can cost a lot of money and time to build, rebuild, and repair. Robotic repair can occur to reduce time and humans needing to fix it, but that’ll cost more money and resources.It’s questionable: is it ethically and morally correct to have androids, human-like robots, or recreate intelligence, a gift of nature that shouldn’t be recreated? This is a discussion about AI that’s popular in the days.Storage is expansive, but access and retrieval may not lead to connections in memory as well as humans could.They can learn and get better with tasks if coded to, but it’s questionable as to if this can ever become as good as humans can do such.They cannot work outside of what they were programmed for.

In the future, artificial intelligence will be used in all sectors of society to greatly change the lives of mankind. However, if it comes to playing an important role in decision-making organizations of the core society of society, it may be a repetition of a rather tedious history for mankind. Because artificial intelligence is made up of huge historical data until the system is constructed.

Being an economics student the economic situation of my country affects me a lot as more than anyone. And as a citizen of India, without the country’s economy being stable I can’t get a good sleep.

A Budget is something which allows the government to regulate the imposition of taxes in various sectors.In a country like India with deep cultural,religious and economic diversity it is extremely important for the government to allocate the resources wisely especially in a such an economic slow down phase. Therefore, a well planned budget is of utmost importance for any government to ensure economic stability and growth.India’s GDP growth rate slipped 5% in the first quarter of 2019-20, the lowest in six years.

With barely one day to go for Indian budget 2020 ,everyone is looking upto the budget speech . The Indian Economy is not in the best shape at the moment ,which makes Nirmala Sitharaman’s second budget all more crucial. People want her to announce measures to boost the economy and keep various sections of the society happy.

The Common Man has been hoping for a cut in personal tax rates for quite some time now. a curious India awaits what could be a ‘Big Bang Budget’.Many people want the government to announce various taxation-related measures so that people could spend more. The key expectation is increasing the threshold limit for the minimum amount not chargeable to tax,from 250000-500000.There is also a list of allowances which need to be re-looked of which Leave Travel Allowance (LTA) one such allowance.With Global travel now becoming affordable for even the common man, foreign travel should be considered by the government for providing the benefit of LTA.Good infrastructure is key to the growth of the economy and therefore the authorities should re-look at introducing the deduction for investment in infrastructure bond. Consumption expenditure can see a rise only when people are left with large chunk of disposible income. The enhancement of the basic exemption limit has been long awaited which would increase the disposable income which would make the common mam to invest in education, health care, housing etc. Real Estate and infrastructural development are considered to be the drivers of economic development, so budget 2020 should come up with solutions to boost the real estate sectors.Deduction under section 80C of income tax act provide various types of payments made by the taxpayer which are eligible for relief such as PPF, housing loan repayment, fixed deposits etc. However limit is very low. So in order to boost such investments expanding the limit is need of the hour.

Budget 2020-21 will be presented on February 1,Saturday and the economic survey will be out on January 31st. Nirmala Sitharaman faces one of the toughest balancing acts of her career and the numbers before her are not very encouraging.

She will be judged for the choices she makes in the budget. The challenge before her is to restore one of the twin engines of Growth–consumption and investment. If the finance minister misfires on February 1st, it will send the markets to a tailspin. The markets are currently riding high anticipation of the minister taking forward the reform agenda. If the budget doesn’t live upto the expectations a big fall can be seen in the equities. Aspirations of the common man are soaring high following repeated announcements by the Finance Minister to provide relief to individual taxpayers. Hence it is a matter of time whether expectations of the common man will be met or not.

We all will know if the Finance Minister will bite the bullet this time around.

In just a few years, India has gone from being one of the world’s fasting – growing economies of the world.An economic slowdown occurs when the rate of economic growth slows in an economy. Countries usually measure economic growth in terms in Gross Domestic Product (GDP), which is the total value of goods and services produced in an economy during a specific period of time.

The Indications of the Slowdown

. The slowing growth of GDP is a indicator of economic slowdown. GDP/Gross Domestic Product is the sum of private consumption expenditure, investment, government expenditure, and net exports.

. “GDP can be thought of as a measure not so much of size…….it measures the movement of money through and around the economy; it measures activity” – John Lanchester.

. Drop in automobile sales: The production in the top 5 firms in India has dropped by about 30% compared to last year.

. Drop in fast moving consumer goods sector: Compared to 2018, the sector’s growth fell by about 9.7% in the rural area. This is a sector that has demand even during the poor economic performance as these constitute basic necessities like toiletries, OTC medicines, etc

. Performance drop of the core industrial segments like coal, steel, cement, etc.

. Industrial output drop: The sector had recorded a mere 2%growth in output.

. Rupee drepreciation: Rupee value is at a 9 – month low. It is estimated that it may plummed to 73.5 by the end of September 2019. It has weighed on India’s key exports like.

. Foreign portfolio investors pulling out of investment in India. These investors have been selling spree especially after the budget presentation that call for taxing foreign investors that operating using ‘trust’ structure. The investors had pulled out 2,881 crore INR during just two sessions of August.

Causes for the Present Slowdown in the Indian Economy

–>The Effect of Demonetization

Indeed, Demonetization can be said to have contributed too much of the slowdown as the Double Whammy of demand collapsing, and supply bottlenecks mean that there is a broad slowdown across the entire value chain of the demand and supply dynamics.

It is also a fact that this has contributed to a freeze on investment by industrial houses and corporates who are now paying down the debt or postponing debt repayments to ensure that their present cash flow is sufficient to remain in business.

–>Too Much Debt

Added to this is the fact that most Public Sector Banks are saddled with high NPAs or Non Performing Assets that have resulted in them tightening lending and instead, seeking deposits and otherwise repairing their balance sheets by making provisions for Bad Loans.

–> Rollout of GST

Fourth, the fact that the rollout of the GST or the Goods and Services Tax on a nationwide basis has led to the slowdown cannot be denied.

Indeed, GST has hampered the small businesses more than Demonetization by forcing them to withhold inventory until they migrate to the GSTN or the GST Network and become compliant with the numerous rules and regulations that are part of this tax.

–> Global Slowdown

It is not these factors alone, and the most important factor is that there is also a global economic slowdown that is happening and given the fact that India is a net commodity exporter, there has been a slump in the volumes of exports.

–> Retreat of Globalization

Hence, what the slowdown means for professionals and fresh graduates is that they would be finding it harder to land jobs as well as see their salaries rise year on year basis. In addition, the policies of the Trump Administration have contributed to a decline in the number of students and professionals going to the United States and added to this, Brexit uncertainties have compounded the situation.

ALEENA K J

I BA ECONOMICS

BY CATHERINE ROSE AGNES

We live in the era of smart technology. Advancement of technology made life very simple. Technology developed and unceasingly continued to evolve since the history of mankind. In the 2000s, technology has transformed into a structure containing large amounts of information. It the past 100 years, technology advances increased with incredible speed as compared to the previous time. Technological transformation plays a key role in the economic growth because accurate or wrongful use of technological advances may make considerable positive or negative impact to a specific firm, sector or nation. Technology realise the production of specific good with less input.

Technological development is an important factor increasing the growth rate of economy at macro level and profits and market shares of the firm at micro level. The social development occurs if a society can make technological advances and reflect them to their social cultural lives. It seems that economy has been guiding the technology as the innovation introduce to the world by technological advances are closely correlated with economy and follow the economic relationships. However these new areas require qualified work force. Thus necessary revision should be made to the education policies to ensure the development of human sources with such qualifications supporting the economic growth.

Economic growth is defined as an increase to the tools and products that will be used to meet the human needs in any country or region. A method to measure economic growth rate involves inquiring whether the has been a ral increase in GDP from one year to the other as GDP represent the market equivalent of all measurable values produced by one economy.

All factors affecting such as characteristic of the product produced, organization of the production process, capacity of the production unit, size of the targeted market, type and quantity of the energy used, size and nature of the business volume generated, supplementary inputs requirement for the semi-finished goods and development level of the infrastructure facilities leave their mark to the country in which the technology is developed.

Some important technological inventions that leads to the growth of economy:

INTERNET : It is the global system of interconnected computer networks that uses the internet protocol suite to link devices worldwide. It is one which change the human life to developed one. Every thing is now on one touch is the best thing of this. Some one is miss using this in some way but who are using in a good sense is utilizing it.

ROBOTICS : It is an interdisciplinary branch of engineering and science that includes mechanical engineering, electronic engineering, information engineering, computer science, and others.

NANOTECHNOLOGY : It is manipulation of matter on an atomic, molecular,and supra molecular scale. The earliest, widespread description of nanotechnology referred to the particular technological goal of precisely manipulating atoms and molecule for fabrication of macro scale products.

Now a days scientific and technological changes from the motivating power of scientific and economic policies adopted to ensure economic growth and development. Technological development bring economic growth. However it also enhances social wealth on the one hand by increasing the income levels and wealth and causes certain social problems on the other hand. At this point, we must emphasise the importance of education. Education may make a great contribution to this ongoing process by re-training the people and helping the individual and to societies adapt to the new condition. Therfore the nation should to derive the maximum benefit from technological advances by supporting and disseminating the positive aspects of this process and minimizing its negative impacts