Akram Hoque, founder editor of Policy Times and former Sr. Asst. Director, FICCI, after simplifying the meaning and technicalities of GDP and GNP and clarifying the nuances of recession and slowdown, said, “When there is a negative growth in two successive quarters, it is called recession generally in American context. India’s growth in June-August quarter was 5.1 per cent and in January-March quarter it was 5.8 per cent. There was a panic button but officially recession was not declared. If the growth quarter in October-December falls from 5.1 per cent then officially recession will be declared. The indicators and figures we are getting from various sectors like automobiles, FMCG, and real estate are clear indications of the slowdown in our economy.”
While comparing our economy with that in China and on the measures taken by India as corrective measures, Hoque said, “Generally when America faces recession, other countries face its heat but this is the first time that other countries are on the verge of recession when America is not in recession. China is also facing slowdown. The growth of China now is 6 per cent as compared to around 10 per cent earlier. Still China’s growth is more than that of India. But the point is China is a 13-trillion dollar economy and we are 2.85-trillion economies. So under such given conditions we can compete with China only when our growth is 12 per cent because China’s economy is more or less four times bigger than India’s.”
Speaking on “Recession in India and Fiscal Management,” at a public meet organised by Jamaat at its headquarters on 14 September, Akram said, “Demonetisation had its own impact but then GST further aggravated the measures taken as a corrective measure like merging of Banks or transfer of Rs 1,76 lakh crore by the Reserve Bank of India to government may turn out to be a futile exercise if efforts are not made to increase the demand and consumption.”
Another speaker, Dr Waquar Anwar, Finance Advisor, and member State Advisory Council, JIH, Delhi, said, there is a feeling within the people that economy is not doing well without technical interpretation of recession and slowdown. We may find economic problems in any country but what is important to note is whether it is cyclical showdown or systemic in nature.
The earlier recession we had in the 90s was cyclical but presently it can be said to be partially cyclical and mostly systemic because of the faulty policies and hurried implementation. The three Ds, demand, debt and default, is very crucial because without increased demand economy cannot be given proper direction. He also suggested that the government should come out of the headline management and listen to the experts after accepting the slowdown in the economy first.