Is the economic scenario in India as bad as some news reports suggest?
One is watching the news and getting worried over the state of economy. One gets to know that economy is in shambles, country is going to dogs and growth is turning into diminution if one believes the data being flashed on screen. One is also bombarded with the poor, worried businessmen, workers who are alarmed at the situations.
In wake of this, one decides to do some talking/walking together to get to know the reality. One is mesmerized with the data thus the search or research results are in data format. Let me share what I feel.
60 percent of the population belong to poor or below poor segment in the country. The meaning of economy is a cruel joke for them thus they are to be excluded from any experimentation. They will never be affected by the growth rate in the country, let it be anywhere from 1 to 20%.
35 percent is middle class consisting of serviced class and small business people. Let us not consider the unemployed person as they were anyways in deep trouble and economy slow down does not affect them any further than remote chances of getting a job anywhere
Remaining people in service – it is analyzed that no drastic salary reduction has occurred in any sector in India in last one year. Salaries have although increased to certain extent and percentage of increment differs widely for the sector and ranks. But it can be considered safe that salary have not been reduced. If you look at the inflation and availability of goods/services, it is reasonable to estimate that service class is able to manage their life much in the same way they were one year before. Their income and expenses are almost matching without getting overtly affected by the “economic slowdown”.
Small businessmen are one of the affected lot in the economy slow down. This is something which needs a deeper analysis. India is a vast country and it is safe to consider a country with at least 500 locations consisting of megacities, metropolitans, cities and towns.
On a very conservative average, it is being estimated that each locations had at least 200 people who were reasonably well off owning to the state of affairs and prevalent conditions of black money transactions, bribes, commissions, property sale/purchase etc etc. on a conservative side, it is being again estimated that each such individual was able to rotate INR 10,000 a day generated through such “deals”. Even though it is a very conservative estimate of locations and individuals, one must be astounded to arrive at a value of 500 X 200 X 10,000= INR 1,00,00,00,000 (one hundred crores) money changing hands every day. This money was the main source of small business customers as these people involve in reckless buying of watches, TV, cars, jeweler, apartments which give the momentum to small business.
It is obvious that present laws, GST, real estate bill, currency usage limitation has drastically reduced such deals and resulting in the slow sales in the market. This in turn slows the consumer products movement and further results in reduction in manufacturing sector slow down.
Overall trade is affected in the above manner and market needs to balance itself after getting the due price correction. One example is real estate price which has seen about 20 % price correction on its own.
Hope the Govt is able to provide more employment to people and settle the issue once and for all