By Niranjana Mary Jude

In today’s fast growing world we tend to take over all those techniques which helps to keep our life running smoothly. As the years goes by, the technology is also moving forward in its advancement. Technology has become an indispensable part of our life. There is no debating that technology has become integral in our daily lives, for mastery of our fast moving busy lives. This key importance of technology in our life, have pushed to the growth of economy in a way.

In technology , the Artificial Intelligence (A I )and Internet of Things (IoT) etc… have brought about so many reasons for the upward movement of the economy and will also have many major impact on economies in the coming years . To know how Artificial Intelligence and IoT will impact the economy, it is important to know what Artificial Intelligence and IoT is .In a way it can be said as ; Artificial Intelligence is a branch of computer science that aims to create intelligent machines . It has become an essential part of the technology industry . Research associated with Artificial Intelligence is highly Technical and Specialized. And IoT is a system of interrelated computing devices , mechanical and digital machines ,objects, animals or people that are provided with unique identifiers and the ability to transfer data over a network without requiring human – to -human or human – to -computer interaction .

In technological improvement in electricity, internal combustion engines and semiconductors facilitated automation are now things of the last century . And now Artificial Intelligence seems to be positioned to automate many tasks once thought to be just the imagination of little child .Thats from driving an automated car to making recommendations and ‘ over and adove ‘ . And now this new age technology will affect economic growth and the division of income between labour and capital. Just like in a coin, thos growth in technology will have both good and bad sides . The former can contribute to shaping an agenda for the field and latter …the bad side effects the economy and cannot be erased off easily .

In our daily life , the enormous changes in technology is directly and indirectly changing our life too. The introduction and implementation of new technology in the factory level have resulted in the increase in production of output in one hand and on the other it have effected the workers in the factory who were displaced from their work . With the implementation of the machines have shown more efficiency and effectiveness in the production level result more than the workers. But if we claim that the introduction of such new technology have brought about new job opportunities it cannot be debated to be true. Because when a new technology is implemented the job is created or given to the people who have a great knowledge about the technology to which they are specialised to. And we forget about those factory workers, who were not specialised and were employed for a specific job. When these people are displaced from their work many might face a situation of unemployment or unable to find a work which can help them to bring about their life to the same old track. These situations may result in poverty, bad health, depression and anxiety etc…. which indirectly affects the economy of a country. And because of the implementation of new technology the company might start earning more profit. This is only making the rich richer and poor poorer. The two main major impact in the economy from my viewpoint is that the slew of new age technologies have brought about inequality among the people and a creation of good decent growth in the GDP of a country.

By Mayugha M S

The economy is the midst of a rapid transformation. The internet mobile technology social media and big data have unleashed a wave of innovation that’s creating thousands of new startups and reinventing traditional industries.

Technology has become ubiquitous right. Every industry whether if it’s the automobile industry or if it’s traditional technology has been impacted.Technology encompasses a huge body of knowledge and tools that ease the use of economic resources as a way to produce goods and services efficiently and innovatively. Technological progress is essential to economic growth and development, and the more advanced the technology available, the more quickly the local and global economy can improve.

Of course, spending money to simply increase the amount of capital in an economy is not the only way to increase productivity. Increases in the quality of capital can also affect growth. The major way the quality of capital is increased is through technological progress, the fruit of research and development. Technological advances can allow a given unit of capital to enable a given unit of labor to increase production. This increase is contrasted to the increase created by simply enlarging capital expenditures. In the latter case, a given unit of labor has more capital to work with and can thus produce more output; while in the former case a given unit of labor can produce more output with a given unit of capital.

The major ways are though innovation and invention. Every year, billions of dollars are spent on research and development by firms and government agencies, like NASA. This money leads to improvements in existing technology and to the creation of new technologies. While innovation and invention may not always be immediately profitable, in the long run they can prove very lucrative for the researchers and the developers–as well as for the economy as a whole, as new, more efficient production technologies become available. Technology has an amazing power of permeate companies. An important measurement of the technology economy is the observing the Worldwide IT Spending volume, which is regarding the corporate spending for hardware, software, data centers, networks, and staff, both internal and outsourced IT services. Currently, this volume is close to USD6 trillion per year.

Technology spending, gross margins and economic growth have a strong relationship when measured by productivity and GDP.

Artificial intelligence deals with the creation of systems that can learn to emulate human task using their prior experience and without any manual intervention. Internet of things, on the other hand is a network of various devices that are connected over the internet and they can collect and exchange data with each other. Technologies and application for a new age of intelligence outlines the background and overall vision for the internet of things , associated existing and emerging technologies.

The powerful combination of artificial intelligence and internet of things can transform industries and help them make more intelligent decisions from the explosive growth of data everyday. Over time technology has changed and become a sort of a lever for progress unfortunate of consequences is there’s displacement of jobs but there’s also the creation side.

INTRODUCTION

The economy of India has been slowing down since 2016-2017 when real GDP growth had peaked at 8.2%. According to the CSO’s advanced estimates, it has fallen to 5% in 2019-2020 ,the lowest since 2008-09,which was the year of the global economic and financial crisis. Nominal GDP growth in 2019-20 is expected to be 7.5%,which is the lowest level since 1975-76,a 44 year low.

India’s ongoing slowdown has been accompanied by erosion of saving and investment rates since 2011-12,when these had peaked at 34.6% and 39% of the GDP respectively, measured in current prices. Since then, the saving and investment rates have fallen steadily to 30.5% and 32.3% respectively in 2017-18.

Although information on the saving rate is not available for more recent years, the investment rate for 2019-20 can be estimated at 30.1% of the GDP by summing up gross fixed capital formation, valuable and change in stock. This persistent erosion of saving and investment rates have reduced India’s potential growth rate to close to 6.5%. In fact, the fall in actual growth is even below this reduced potential growth at 5% in2019-20.

The financial system and more particularly, the banking system is in distress. The non-performing assets ratio of public sector banks as of September 2019 stood at 12.7%. The non banking financial companies are also under pressure and further deterioration in their position would also affect the banking system.

Had the banking system been strong, it could have been used as a lever for stimulating growth. This is hardly so. In fact, it has become a drag on the fisc. On the monetary side, the RBI has the repo rate since January 2019 by 135 basis points in five incremental steps . However, the transmission mechanism has been extremely slow due to problems and rigidities in India’s financial sector.

Any room for further reduction in the repo rate does not appear to be round the corner, as the CPI inflation rate spiked in December 2019 at 7.35%,which is well outside RBI’s comfort limit of 6%. All eyes are, therefore, on budget 2020-21 and the available fiscal policy options.

REASONS FOR SLOWDOWN IN INDIAN ECONOMY

The Government is committed to make a 5 trillion dollar economy in five years from now. But it seems the Indians are buying less as the economy is losing steam. There are many factors behind India’s economic slowdown such as weak demand in auto sector, a slump in fast-moving consumer goods (FMCG) sector, dip in core sector growth, drop in industrial production. IMF and CRISIL slower growth rate projection for India.

1.WEAK DEMAND IN THE AUTO SECTOR

Auto companies such as Maruti Suzuki, Hyundai and other three companies reported a double-digit decline in sales on July due to subdued consumer sentiment. Domestic sales of Maruti Suzuki India (MSI) were down 36.3% at 98,210 units last month compared to 1,54,150 units in July last year. Hyundai motor India Ltd (HMIL)posted 10% dip in domestic sales at 39,010 units last month as against 43,481 units in July 2018.

Similarly, Mahindra reported a 16% decline the domestic market at 37,474 units as compared with 44,605 units in July 2018. Honda cars India Ltd (HMIL) posted 48.67⁵ decline in domestic sales to 10,250 units in July as against 19,970 units in the year-ago period . Richer motors while commenting on company’s performance said,” The two-wheeler and CV(commercial vehicles) industry continue to face headwind on account of weak consumer demand “.

2.CORE SECTOR GROWTH NEARS 4-YEAR LOW

Growth of eight core industries dropped to 0.2% in June mainly due to a contraction in oil-related sectors as well as in cement production, according to official data. The eight-core sector industries-coal, crude, oil,natural gas ,refinery products, fertiliser, steel, cement and electricity-had expanded by 7.8% in June last year. During April-June, the eight sector grew by 3.5% compared to 5.5% in the same period last year.

3.A SLUMP IN FMCG SECTOR

FMCG major ,Hindustan Unilever Ltd (HUL),posted seven per cent of volume growth in the last quarter, a fall of 11% from the April-June quarter of 2018. Also, another major the sector-ITC and Godrej have also reported a single-digit growth,. While announcing the latest quarterly results. ITC said, ” The FMCG-other segment delivered a resilient of performance during the quarter amidst a marked slowdown in the FMCG industry across urban and rural markets “. Godrej consumer products said, ” Our India business delivered steady volume growth of 5%, amidst a general slowdown in staples consumption. We expect a gradual recovery in the coming quarters for industry and also for our business “.

4.INDUSTRIAL PRODUCTION GROWTH SLIPS TO 3-MONTHS LOW

Industrial production growth dropped to 2% in June, mainly on account of the poor show by mining and manufacturing sector, according to official data released on Friday. Factory output, as measured by the index of industrial production (IP),had expanded by 7% in June 2018. There was a slowdown in the manufacturing sector, which grew at 1.2% in June as compared to 6.9% a year ago. The expansion in power generation sector stood at 8.2%,compared to 8.5% earlier. Mining growth dropped to 1.6% in June from 6.5% in the corresponding month of the last.

5.IMF,CRISIL CUT INDIA’S FY20 GROWTH FORECAST

Last month, the international monetary fund (IMF) projected a slower growth rate for India in 2019 and 2020 , a downward revision of 0.3% for both the years, “India’s economy is set to grow at 7% in 2019,picking up to 7.2% in 2020 . The downward revision 30.3% point for both years reflects a weaker-than-expected outlook for domestic demand “,The international monetary fund (IMF) said in its world economic update. Rating agency CRISIL, has lowered its estimate of India’s GDP growth by 20 basis points (bps) to 6.9% for the current fiscal ending March 2020 due to downward risks like a weak monsoon and slowing global growth.

CONCLUSION

Perhaps in the coming budget, we need to allow some relaxation and take the fiscal deficit to 3.6% of the GDP. We must, however make sure that the additional expenditure is only for capital expenditure. The Government should also clean up the accounts and show a true fiscal deficit. The reform agenda must be carried further. While there are many things that require to be done, one area that require immediate attention is the financial sector, restoring it to a healthy state is a must for reviving the economy. It is also true that a revival of the economy will help to reduce the non-performing assets. Over the medium term, a serious look is needed on the public sector banks. A reference to this in the budget will help. In my opinion, the focus of Government must be exclusively in development of our country.

DONE BY:LAKSHMIPRIYA. D

By Tiya Jacob

I BA Economics

Economic slowdown occurs when the rate of economic growth slows in an economy. India has seen a economic slowdown in 2019 , with the country’s real estate ,automobile ,construction sectors and overall consumption demand facing a serious and constant decline. We had witnessed a drastic fall in gross domestic product (GDP )growth rate to 4.5 percent,even as international bodies like The International Monetary Fund(IMF)) and the World Bank repeatedly cut Indian economy’s growth rates. This was described as the lowest GDP growth rate in the previous 26 quarters, which means in over six years. The main reasons attributed to the fall in GDP growth rate were contracted manufacturing activities, weakened investments and lessened consumption demand.

In the words of former governor of RBI Raghuram Rajan,there are signs of “deep malaise”in the Indian economy. ” Growth is slowing significantly and there is currently little fiscal space available to the government to spend more. Corporate and household debt is rising and there is deep distress in parts of the financial sector and Unemployment seems to be growing”.

Economic slowdown and high unemployment put pressure on Modi’s re-elected government and the Central Bank to stimulate the economy to boost growth and create more jobs.

Reasons for economic slowdown

• Effect of Demonetization: To start with, private consumption has taken a beating due to Demonetization as consumers suddenly prefers to hoard cash or keep it in the bank instead on 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 to postpone consumption except that of essential goods and services. Demonetization has also lead to small and medium businesses to withhold investments since they too operate on a cash basis and the cash crunch has left them high and dry. Thus what we have is a situation wherein cash has dried up leading to a slowdown in the economy.

• Rollout of GST: The fact that the rollout of the goods and services tax (GST) on a nationwide basis has led to the slow down cannot be denied.Indeed ,GST has hamperd the small businesses more than Demonetization by forcing them to withhold inventory until they mitigate to the GST Network and become complaint 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.

• Unemployment: A drop in number of employment and wage levels has hastened the slowdown and the slump in consumer demand. High level of unemployment arises due to may factors like poor employability of graduates ,low job creation etc contribute to the economic Slowdown.This is because less employment brings in lesser income and hence lower demand.Consumption is the bedrock of demand ,a vital market force needed to fuel the economy.

• The liquidity crisis and the issues revolving around the banking sector are one of the major contributors to the economic slowdown.Due to the low liquidity,the banks are reluctant to lend credit to the businesses.This much- needed credit could infuse life into decelerating economy.

• International Issues: International issues are also affecting the slowdown.The US China trade war and Brexit are the political components of these global spillovers .The US is also engaging in retaliatory tariff actions against India, especially when the domestic economy was looking to the global demand potential to compensate for the dropping domestic demands.

• Global slowdown: The most important factor is that there is also 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 Foreign Direct Investment(FDI) 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 in the Indian economy.

• Lower investments: This is the final nail on the slowdown coffin . Investments are a key to more business activities, resulting in more jobs higher earnings and eventually higher spending .This virtuous cycle of investments is the key focus of the previous year’s economic survey as well and is credited to be the Central of the government reforms.. Investment levels have bottomed out in the last two years as foreign institutional investors marked an exit from the Indian Stock markets.FIIs have withdrawn about 15000 crore from the Indian markets in 2018-19. A poor consumption outlook is likely to result in businesses holding back on their investment plans.We would need investments to revive .For that a number of measures need to be undertaken,including the government ramping investments in building public infrastructures and other assets.

By Alamelu Chelat

The world which we live is changing at a rapid rate, driven by advances and breakthroughs in technology. Digital disruption is set to transform the global economy, our work lives and herald in the fourth industrial revolution. The fourth industrial revolution is essentially a digital revolution, underpinned by the unprecedented scale and scope in the rapid proliferation of digitization, and the increasing receptiveness of people towards them.

Though digital disruption and technological innovations are assured to increase productivity and profits, the whole slew of forecasted changes are regarded with ambivalence and fear by those in the workforce and the ones seeking to enter it. Even as we are only on the cusp of this digital disruption, all over the globe, we are starting too percieve glimpses of how altered the landscape of our economy will be once we have succeded in completely disrupting it. Airbnb, the world’s largest accommodation provider, actually owns no property. Facebook, the world’s largest media company (though they vehemently denies being one), generates no content and Uber, the world’s largest taxi company, owns no cars.

From where we are standing, it seems that job security and the benefits of a permanent workforce are going out the window in the post-disruption setting. Our world is increasingly shifting towards a gig economy, where workers are employed in short term contracts and earn their income through freelancing. Gig economy has certain benefits, mainly flexibility in setting work hours and locations to work from, the ability to choose projects that you may be interested in, and the variety of handling different kinds of work according to your schedule. This may sound good to some, but the lack of employee’s benefits, isolation, stress and burnout are cons that are too big to ignore for many, especially for those who are not from privileged or well- off backgrounds.

Another change is that companies are switching their operating paradigm with regard to labour and technology. Rather than technology assisting labour, it will be the other way around. Role of labour in organisation will move from “doing” to “thinking”.
Automation substitutes human labor in tasks – in both physical and cognitive spheres- which are repetitive, predictable and routine. Automation is considered to be one if the biggest things which will shrink the workforce, particularly threatening those working blue collar jobs. Amidst all the speculation regarding unemployment there is also the concern about who will benefit and who will be left out in this fourth industrial revolution.

However the future is not something that merely happens to us, we have the ability plan and decide how we are to deal with all these changes. With the increasing requirement for talent, evolving educational systems and skill training is becoming necessary. Companies are encouraged to see human capital just like any other capital and to invest in it. There us also growing consensus on the need to prepare students for the future. Schooling which emphasize creativity, empathy, emotional intelligence, lifelong learning will be most pragmatic, since job destruction and creation in in an ever changing flux. In the future, labour would have to work alongside machines rather than compete with them, thus it also makes sense to give main focus on skills not likely to be emulated by a machine.

However the determining factor is inclusivity. Government and stakeholders will have to take steps to ensure social protection for those likely to be affected and also to level the playing field so that participating and benefitting in the digital revolution is not confined to a minority of elites at the expense of the masses. Social security nets, universal basic income and socio-economic protection have to be made part of state policy. If accesibility to digital infrastructure and democratization of gains is prioritized and achieved, the tech revolution might be good news after all.

India is now in the midst of a significant economic slowdown. India’s rapid economic expansion in recent years has lifted millions of people out of poverty. It is not only Indian’s who are suffering – the Indian government too.Even as the Indian governments economic mismanagement is responsible for much of the slowdown, it has itself fallen victims to these blunders.As the economic slowdown exist ,there is a chance for recession.The government should take necessary actions to cure this economic slowdown.

Let’s take a closer look at 5 reasons why the economy is slowing down .

1. Decrease in consumer demand in market

Consumer demand in market has declined in a large amount. Demand for the product and services has fallen.When there is no demand supply has to be stopped due to pilling up of stocks and productions units go idle, leading to cut in labour force.It further reduces the income leading to less demand and further reduction in supply and stopping of production. It’s such a big vicious circle.

Automobile industry is one of the largest industry that gives employment to about 3 crore people in India. Here we can see the largest decline.Nowadays, sales of the automobile industry is in a bad condition. Almost all the companies are facing negative growth in this industry. Almost all the companies are unable to sell products. When the demand falls ,companies would definitely cut their cost.If their sales are very low, they would cut their labour force and close their factories.Thus the fall in price and investment would affect the economy in a bad way.

2. Investment Decline

A lot of people has invested their money in the stock market.As the stop market crashes, many people lost their money and their confidence to invest in the stock market.There happens a large decline in the investment scenario.After the coming of the Modhi government, within 50 days about 12 crore rupees lost for the stock market investors. It really shows the economic slowdown.

3. Job losses

Unemployment is increasing day by day. The reason for the fall in the consumer demand and other issues are due to the job losses. Due to the negative losses in the automobile industry, about 3.5 lakh people lost their job. In 2017 ,the unemployment rate was 5%, but now it has increased to 7.2%. Thus we can notice an increase in the unemployment rate which really causes the economic slowdown.

4.Low GDP Growth

GDP is always used to measure the economy. Even our government tries to increase the rate of GDP ,the decline in the growth of GDP really affects the economy.Our government reveals that our GDP rate is 6-7% ,but the International organisations like IMF and World Bank declared that the GDP rate of India is overestimated.Our Indian economy has the GDP of less than 6%. Another fact that we can relate to GDP decline is the position of the economy . Once, Indian economy was the 5th largest economy in the world, but now it has fallen to the 7th position.

5.Decline in the value of money

The value of money has decreased against the US dollar.It is one of the biggest indicators of the economic slowdown.Even there is a fall in the exports too. Fall in the exports and the decline in money value are not good for the economy.

Other reasons for the slowdown of economy are demonetization,GST implementation and problems in agricultural sector, increase in interest rate, monsoon phenomena, etc.Most of the problems are government related, some are global problems, individually related problems ,natural phenomena that we couldn’t control. Only correct government reforms should find the solutions.Policies that focus on education, employment, economy and the reforms that leads to progress in economy and business can solve this issue to a great extent.

BY: KAMEELA RESMA
I BA ECONOMICS

By Parvathy Ramanan

India is one the fastest growing economies in the world . But in the recent years, there has been a slowdown in the economy . Slowdown on economy occurs when the rate of economic growth declines . It is calculated in terms of Gross Domestic Product which is totality of goods and services produced in the economy in a certain period of time . Recently, the GDP fell by 5.6% as compared to a previous 6.8 %. Few reasons for such a slow down is given below :

1. Demonetisation

On 8 November 2016, the Government of India announced the demonetization of all ₹500 and ₹1,000 notes. Demonetisation is the act of stripping down a currency of is legal tender .Along with it ,it announced the remonetisation of new ₹500 and ₹2,000 notes. The Prime minister of India Narendra Modi claimed that the objective of demonetisation is to curb black money and corruption of hoarding cash , preventing the counterfeiting of currency notes and fight against terrorism and terror funding.

The demonetisation and remonetisation of notes has had an adverse effect on the economy. It has majorly impacted businesses, agriculture sector ,industrial sector, stock market . The implementation of such a huge plan have certainly shook the confidence and trust of business men . According to the secretary general of the Confederation of All India Traders (CAIT) ,Mr Praveen Khandelwa , in the first four months after demonetisation, business was down by as much as 50% for small traders. It took about six months for the situation, currency flow and business to normalize.” Not only during those months ,but I think even after 3 years of implementating it ,it still has an effect on the working of the firms . About 61% of Indian population is rural and are dependent on agriculture which is their primary source of living. The sector is mainly dependent on cash for carrying out each transaction from buying seeds ,fertilizers to transportation of their produce in the markets. But after the notes were stripped of their legal tender , farmers couldn’t purchase seeds at the right time for the upcoming sowing season . And due to this ,their harvest was low the coming year .

According to a 2018 report from the Reserve Bank of India, approximately 99.3% of the demonetised banknotes, or ₹15.30 lakh crore (15.3 trillion) of the ₹15.41 lakh crore that had been demonetised, were deposited with the banking system. The banknotes that were not deposited were only worth ₹10,720 crore (107.2 billion), leading analysts to state that the effort had failed to remove black money from the economy. The BSE SENSEX and NIFTY 50 stock indices fell over 6 percent on the day after the announcement . The move reduced the country’s industrial production and its GDP growth rate. I think the mere implementation of demonetisation has brought the GDP to a low 6.7% from 7.1% . It has shakes the ground of confidence of the common man , the trust of the business organizations and farmers on the government.


2. Decline in PFCE

PFCE or Private Final Consumption Expenditure is the expenditure incurred on goods and services by households and non profit organizations serving households . In the recent years, the Private Final Consumption Expenditure is declining which is one among the major reasons why the growth rate is slowing down . People are not willing to spend their money as they are more willing to hoard their cash or spend less on consumer goods .
In the rural areas too ,there is decline in demand for goods . Most of the transactions taking place in rural areas are on cash and people there too are willing to consume less. After the demonetisation , there has been a huge loss of jobs which has lead to decline in income of individuals . So will less cash in hand ,people are not willing to purchase now but are postponing their consumption except on necessary goods and services . The people should spend more on the consumption of goods . If there is no Consumption, the stock of the producers lie unsold which makes the producer to reduce to production ,which will lead to less contribution to the economy and will lead to low GDP .

3. Struggling MSME’s

MSME’S or Micro ,Small and Medium Enterprise’s contributes to approximately 37% to the GDP and is considered to be the backbone the Indian economy . They are the second largest employment sectors in India after agriculture . These industries are dependent on cash for their day to day needs to pay wages, to net working capital requirements etc. GST along with demonetisation affected these industries. Many of them give their good on credit to their customers and the longer it takes for them to collect these payments, longer they will face cash crunch. This will affect their day to day operations, reducing production and sales, affecting the employees. Moreover procedural delay and transaction cost alone affected them when there was a downturn in demand. The global economic slowdown has also affected these industries

4. Decline in Investments

Investment are really important for a organization to successfully continue its operations . An investment in an organization leads to advancement in the production and leads to higher earnings ,higher consumption and certainly higher employment opportunities to people . So ,investment helps a great deal in the growth if the economy . But in the past 2 years, the investment has gone down . If there is no investment, there would be fall in production , which leads to fall in earnings and employment opportunities, directly affecting the economic growth . For example in the case of vehicles, faster sales indicate a robust activity on the infrastructure and industrial front. The sales of vehicles have gone down by 9.5% during April to June 2019 ,where as between April to June 2018 ,the sales had gone up by 51% . This shows that things are not well at the investment front .

5. NBFC crisis

NBFC’s or Non Banking Financing Companies are non banking financial institutions which grant credit to those segments of the population to whom banks are skeptical in lending loans because if their risky credit profile. NBFC crisis started with the failure of IL&FS , one among the most respected NBFCs in India. They grant loans for infrastructure projects, white goods and houses. With a debt of around 90000 crores and the inability to access enough resources to pay back the loans, found them in a asset liability mismatch. They had more liabilities and fewer debt. This led to banks reducing their NBFC exposure resulting in lack of access to resources to pay the debts. Moreover , infrastructural projects had longer gestation period which meant higher risk . IL&FS used to raise loans through commercials papers which affected the individuals, mutual funds and banks. It also led to a decline in investment projects

6. Inflation

Inflation is a situation of a sustained increase in general price level of in the economy in a period of time or the increase in price of living due to the increase in price of goods and services . In the recent past, the prices of vegetables such as onions ,which are consumed widely by the rich and poor rose to around Rs 200 per kg . Consumer price inflation in India jumped to 7.35% in December of 2019 from 5.54% in November and well above market expectations of 6.2% . As inflation rises ,the business men tend to raise the price of their products and the banks have to raise the interest rate in order to maintain a profit margin and higher rates means that the marginal businesses will fail, thus increasing unemployment and harming the overall economy. As there is high inflation ,it increases the cost of living and also makes the consumers want to spend their money before the value for it falls . This can lead to debt and failing to save money and low economic growth . According to the Indian Ministry of Statistics And Programme Implementation, inflation rate of India as of May 2019 was 5.5% . The government should try to keep the inflation in control or it can lead to further slowdown in the economy.

By Charisma Ann

Technology has, indubitably, led to massive changes in the economy. The first five information technology waves of Defense, Integrated Circuits, the Personal Computer, the Internet and Social Media have influenced society. But the upcoming advances in technology will lead us to believe that the existing technology is just a tiny speck of dust in comparison to the gargantuan transitions like self-driving cars, Artificial Intelligence(AI), Robotics, Virtual Reality, etc that are in the process of becoming reality.

The Essential Eight technologies that matter now are:

1) Artificial Intelligence(AI)
It refers to software algorithms that are capable of performing tasks that are normally performed by humans.

2) Augmented Reality(AR)
It refers to the addition of information or visuals to the physical world through graphics or audio overlay. It is a simple combination of real and virtual worlds.

3) Blockchain
It is distributed electronic ledger that can record and confirm transactions with reliability and anonymity. It is the technology that underpins digital currency like Bitcoin, Litecoin, etc.

4) Drones
It is a flying robot that can be controlled remotely or fly autonomously using software-controlled flight plans which are embedded in their systems along with onboard sensors and GPS (Global Positioning System). It is more formally referred to as Unmanned Aerial Vehicles (UAVs) or Unmanned Aircraft Systems (UASs).

5) Internet of Things (Iot)
It is a system of interrelated computing devices, digital and mechanical machines, animals, objects or people that are given unique identifiers (UIDs). They are given the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.

6) Robots
They are virtual agents that assist, automate or improve human activities using set instructions.

7) Virtual Reality (VR)
It is a computer-generated simulation of a 3D image or a complete environment that viewers can interact with in realistic ways. The difference between Augmented Reality and Virtual Reality is that while AR only incorporates certain virtual objects or data into the real world (A good example would be the game Pokemon Go), VR enables a complete physical immersion into that virtual environment.

8) 3D Printing
It is a manufacturing technique that used layering or printing successive layers of materials to create 3D objects.

How will this technology impact our economy?

1) Strategy: These technologies provide manufacturers with myriad opportunities like to sensorify their existing products, create intelligent new offerings with value-added analytics, software services, etc. The Government plans to use these advancements in healthcare, agriculture, smart cities, etc.

2) Operations: AI, robots, etc can help improve operational efficiency and provide significant competitive advantage. 3D printing has the power to shrink supply chains, cut product development time, etc.

3) People and Talent: This is one of the more fretful effects of technology. It could lead to massive unemployment. The solution to this predicament would be to edify the upcoming and existing generations these advancements.

4) Impacts income distribution: Workers who are displaced by technological advances may not possess required skills and therefore, find it difficult to find employment. This leads to a further widening of the rich-poor gap.

5) Environmental degradation: It could lead to health and environmental issues because of air pollution, exposure to harmful chemicals, etc.

6) Contribution to GDP growth: The doubling of mobile data use, internet accounts, e-commerce, etc lead to an increase in the GDP growth rate.

7) New services and industries: Transition to cloud computing, the availability of public services online, ICT (Information and Communication Technologies) enabled emergence of app industry, etc have been major contributions to the development of new services and industries.

8) Wider reach: Online platforms have led to global access for both entrepreneurs and customers.

Done by Sreelakshmi M C

India is one of the world’s fastest growing large economies , sometimes being touted as a potential economic and geopolitical counterweight to China . Recently,however, its growth fell to its slowest pace in six years.

Since the turn of the century . India’s economy has grown at a rapid rate, helping transform the country between 2006 and 2016, rising incomes lifted 271 million people out of poverty meaning, the proportion of Indians still live in poverty has fallen dramatically from around 55% to 28%. Access to electricity has also improved. In 2007 just 70 % of the population had access to power. By 2017 , that grew to nearly 93%. All this developments has been supported by a booming economy , but as of late, that expansion has began run out of the steam. In the third quarter of 2019, india’s economic output grew by 4.5% – making it first time the country’s growth dipped below 5% since 2013. For contest, 4.5% growth is still much higher than that of developed countries like the USA.

Causes:

●Employment pattern

The other structural problem relates to employment. Our labour markets have many growth-impeding rigidities — a low labour force participation ratio (which means a large section of working-age population, mainly women, choose not to work); a high percentage (over 70 per cent) of rural labour ostensibly engaged in agriculture, but adding little to productivity or income; and a large informal work structure, where reportedly about 46 per cent people are self-employed and 20 per cent casually employed, making income estimation little more than guesswork for two-thirds of the labour force.

● Foreign portfolio investors pulling out of investment in India

These investors have been on a selling spree especially after the budget presentation that called for taxing foreign investors that operate using ‘trust’ structure. The investors had pulled out of 2,881 crore under INR during just 2 sessions of august.

● Farmer’s empty pockets

Non – food inflation continued to surpass food inflation in the past 2 years . Amounting to income transfers from rural to urban areas.

Farm income could get a leg up from the government’s income transfer scheme, and a rise in food prices would boost the terms which could make things better in the coming years

● Tight monetary and fiscal policies

Monetary policy was focused on inflation control, which ensured interest rates remained hard.

The combined fiscal deficit of the centre and state was high and the government committed to Lowering its fiscal deficit ,it left little wiggle room for government to increase its spending to pump-prime the economy.

● The US China trade war

The US CHINA trade war is the leading dampener in India’s growth story.

In addition to this, the timing of some of the policy changes , the goods and services tax, demonetisation, measures to curb corruption , and the move to flexible inflation targeting led to a combination of lower inflation, higher real rates , and lower nominal growth

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

By Varsha J

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.

Indeed, given the fact that India was touted as the Fastest Growing Developing Country for the last two years, the slowdown has also caught many of those making such claims by surprise.

The reasons for the current economic Slowdown are the collapse in private consumption and Investment freeze,The effect of Demonetization,Too much debt,Roll out of GST and also the global economic slowdown.

★Collapse in private consumption and Investment freeze: As a result of Demonetization consumers prefer to hoard money and keep it in the bank reducing the expenditure in consumption.Moreover demand has fallen in rural areas due to cash shortage

★The effect of Demonetization: We have a situation wherein cash has dried up leading to a slowdown in the economy.It is not only the private consumption but also the big corporates which are drowning in debts.There is also a freeze in investment by industries who are now downpaying their debts.

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

★Rollout GST: It has hampered the small scale industries by forcing them to withhold inventory until they migrate to GST network.

★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.

Lastly the slowdown is a part of structural shift wherein economy is shifting gears from high investment era to low investment era as well as transition to a cashless digital economy.