×

UPSC Courses

DNA banner

DAILY NEWS ANALYSIS

  • 16 October, 2019

  • 3 Min Read

ANOTHER GRIM REMINDER

ANOTHER GRIM REMINDER


Context:

The economic slowdown of India, whether due to cyclical Downturn or structural factors.

Projections:

IMF projects India's annual GDP at 6.1 %.
World Bank projects India's annual GDP of 6%
Moody's rating agency projects it as 5.8%

Most of the multilateral Agencies call it a structural failure.

Reasons for structural failure :

1.Weak financial sector due to high NPA and high share of NBFCs on banks total credit. NBFCs has borrowed 40% of bank's credit.
It poses broad-based contagion risks.

2. Sharp slowdown in major economies such as the US and Eurozone has spill over effects in India. This scenario has lead to Protectionist policies and trade wars.

Eg: "America first policy" ; "Made in China 2025" policy

3. Poor domestic demand.

4. Poor Industrial growth due to twin balance sheet problem.

5. Poor agricultural growth rate due to poor reforms in the institutional factors like land and credit.


Solutions :

1. Financial sector reforms to solve problem of both banking crisis and economic recession
2. Codification of labour laws and land laws
3. Infrastructure creation
4. Increase the rural demand

Economic cycle :

It is the alternating expansion and contraction of the business or economy.

How the Economic Cycle Works :

The four stages of the economic cycle are also referred to as the business cycle. These four stages are expansion, peak, contraction, and trough.

During the expansion phase, the economy experiences relatively rapid growth, interest rates tend to be low, production increases, and inflationary pressures build. The peak of a cycle is reached when growth hits its maximum rate. Peak growth typically creates some imbalances in the economy that need to be corrected. This correction occurs through a period of contraction when growth slows, employment falls, and prices stagnate. The trough of the cycle is reached when the economy hits a low point and growth begins to recover.


Stages in economic cycle :

Expansion ,peek , recession ,depression, trough and recovery.

Source: THE HINDU


International Day of the Elderly

International Day of the Elderly The United Nations observes October 1 as International Day for Older Persons as part of its efforts to raise awareness about healthy ageing. About A recent UN Department of Economic and Social Affairs (UNDESA) report, "World Population Prospects 2022," predicted significant shifts in global

Global Innovation Index 2022

Global Innovation Index 2022 India was recently ranked 40th out of 132 in the World Intellectual Property Organization's Global Innovation Index (GII) 2022 rankings (WIPO). In 2021, India was ranked 46th, up from 81st in 2015. What are the Report's Highlights? Countries are ranked as follows: For the 12th year in a

Skill Development in India: Challenges and Issues

Skill Development in India: Challenges and Issues The 13th Federation of Indian Chambers of Commerce and Industry (FICCI) Global Skills Summit 2022 was recently inaugurated by the Union Skill Development and Entrepreneurship Minister. Theme: Making It Happen: Education to Employability. ??????? What is the Current Situation of Skill

Stress in workplaces: WHO & ILO Report

Stress in workplaces: WHO & ILO Report The World Health Organization (WHO) and the International Labour Organization (ILO) recently released guidelines to address mental health issues in the global workforce. ??????? What exactly is work-related stress? Long hours, a heavy workload, job insecurity, and conflicts with coworke

Abortion rights for single Women

Abortion rights for single Women Recently, the Supreme Court ruled that all women in the country, regardless of marital status, can have an abortion up to 24 weeks into their pregnancy. What is the Supreme Court's decision? Ruled over an ancient law: It has ruled on a 51-year-old abortion law (The Medical Termination of Pregn

Toppers

Search By Date

Newsletter Subscription
SMS Alerts