India has suffered at the expense of poorly implemented economic policies that have caused distress to the nation at large. Sources claim that “the GDP growth has declined for 6 straight quarters”. The former Finance Minister, Yashwant Sinha stated that the private investment and the industrial production has experienced a severe decline. The Agriculture sector and the construction industry has suffered a huge loss. According to him, there has been a considerable decline in the export industry and the service sector. The opposition is going rampant with criticism against Modi’s economy. Although India has experienced its fair share in political mudslinging, analysts confirm that the problem attributed to something that is far more deeply rooted. The problem, claims Dr. Surjit Bhalla, is accredited to the very structure of Indian economy.
The Demonetization Drive
The Demonetisation drive was implemented to curb the flow of unaccounted income and tackle terrorism. But the policy failed to put an end to the circulation of unaccounted cash at large. It has caused distress in the functioning of the economy. Rahul Gandhi, Congress vice-president stated that India’s economy has undergone “tremendous damage” where “reckless and dangerous” decisions have been “hastily applied”. In fact, Gandhi was outraged with the fact that the Prime Minister did not consult the Chief Economic Advisor and the Parliament before the Demonetisation decision was taken on the 8th of November.
He exclaimed that the poorly implemented strategies have had a devastating impact on the Indian economy. Yashwant Sinha believes that the demonetisation drive has ultimately resulted in a colossal disaster in the Indian economy. Also, it has severely disintegrated consumer and investor confidence in the government. The consequences of the monetary ban have cost the lives of several establishments and indigenous businesses.
The implementation of GST
The implementation of the GST was considered to be the greatest economic reform that India has experienced post-independence. However, the poorly implemented GST has caused distress to small-scale business enterprises, with alarming results of unemployment across the country. Several analysts continue to criticize the disastrous implementation of the tax reform in India. Mr. Gandhi pointed out that the country has seen a significant rise of nearly 30,000 job seekers in the market. However, the government was only able to create 500 sources of employment every day. The agriculture sector has pushed farmers to a desperate state with an alarming report of suicides. It is important for the government to address the problems of GST in order to elevate the conditions of indigenous businesses and exporters.
Backlash faced by the government
It is important to analyze the structural nature of the Indian economy before examining the consequences of individual policies. The country has experienced several instances of policy implementation from a top-down centralized process of decision making. In fact, this deeply disturbed the Congress vice-president with the government’s ignorance to consult with the institutional knowledge of the country before making such hasty decisions that prove to cause a decline in the growth of the economy. Analysts confirm that a centralized style of governance is often proved to be unsuitable for the planning the economy of a country that thrives on diversity.
The survival of the country requires the establishment expert institutions such as the new Economic Advisory Council that aims to monitor the implementation of policies. Hence, it is essential for the government to consult a range of advisors and ministers within the government itself to facilitate the smooth flow of policy-making. Lastly, the rise in a decentralized approach can enable the government to avoid the impacts of misguided policies and economic decline.