Indian Economy in Severe Recession
CPI(M) Polit Bureau has issued the following statement on September 1
THE data released by the government yesterday shows the total devastation of the Indian economy that began much before the Covid-19 pandemic emerged. A 24 per cent fall in the GDP growth rate is phenomenal and unprecedented. The cumulative impact of demonetisation, GST implementation and the abrupt unplanned, unprepared national lockdown have all contributed to the destruction of the Indian economy.
The primary cause for this is the massive fall in domestic demand, i.e., sharply declining purchasing power in the hands of our people. Instead of addressing this issue by vastly enhancing public investments to build our much-needed infrastructure and generate large-scale employment, which would have strengthened the demand in the economy, the Modi government is focused on pursuing the neoliberal trajectory of making more funds available for investment by private corporates, giving them greater tax concessions and looting national assets.
No amount of incentives for private investment can revive the economy. What is produced by such investments needs to be sold in the markets. There are no buyers, both globally and domestically.
The CPI(M) has all along mounted public pressure on this central government to increase governmental expenditures. The government, however, continues to pursue policies of constraining expenditures which, in turn, also drastically reduced governmental revenues because of the economic recession.
The Polit Bureau of the CPI(M) reiterates that massive hikes in public investments coupled with cash transfers and free food is the only manner in which any meaningful economic recovery is possible along with providing people some relief and livelihood.