Are there Global causes affecting Indian economy ?

GDP reached 4.5 percent in the current quarter, which is at the lowest level in the last six years. India's GDP was 5% of the previous quarter. Since the presentation of the budget in July this year, the government has taken several steps to bring the economy back on track. But on seeing the statistics related to the economy, the question arises whether the steps taken by the government are proving effective? During this time you will see that more than 30 such steps have been taken by the government. But the most discussed thing is the corporate tax cut. On 20 September, a reduction in corporate tax was announced. There are two levels of this tax reduction. There was talk of applying 22 percent rate to all companies, while the rate of 15 percent on new manufacturing companies was talked about. The biggest question arose whether the economy was benefited by this new cut or not.

Looking at the situation so far, it is known that due to that no new investment has come in India. But there is also a big reason behind this. It takes two-three months to see the effect of such a decision, sometimes even up to six months. If we look at the stock market, the super rich surcharge that was increased in the budget had a bad effect on the stock market. Later, the government withdrew this step but by then the stock market had suffered. The stock market did not recover from that situation very quickly. After that now the situation is being seen in the Indian stock market, the components within the country are not as responsible as the global economic situation.

Global causes affecting Indian economy

The situation of trade war between the USA and China has affected the economy of the whole world. This is the biggest reason for the Indian economy being affected. The second reason is that in Europe, America, all of Africa or all of Asia - somewhere in all the countries of the world the economy is lying sluggish. There is a situation of recession in many places. For the earning of any country, it is important that the goods manufactured in the country are sold. If our goods are sold outside the country, then we will earn. There is a double hit on India - Goods are not sold in the domestic market even within India, and there is no one to buy our goods in the foreign market because the situation is bad there. These are the reasons which have affected the Indian economy to some extent.

Are there policy mistakes regarding the economy?

India has taken measures to increase investment so far. But it is also important that steps should be taken to increase consumption simultaneously. Economy is a vehicle that has two wheels i.e., invests and consumes. If the government increases investment but does not take steps to increase consumption, then it has some effect. Whether it is about the budget or after that, especially the matter of reduction in corporate tax - it was a big step to increase investment. To increase consumption, the government will need to reduce income tax.

If income tax is reduced, more money will come in the hands of people. With this, if people are assured that they do not have to worry and their jobs are safe, then people will start consuming. If consumption increases, the industry will be excited to invest more and make more goods. The one drawback in the entire system is that the government has not made arrangements to give more money in the hands of the people to increase consumption. If the government has done this, then the situation of the economy can be much better.