#India’s #Economy Shrinks Sharply as #COVID19 Slams it. #China has come roaring back, #US , #Europe & Japan are finding their feet but
India’s economy shrank 7.5% last quarter on top 24% decline in previous quarter. #Modi #BJP #Hindutva |The New York Times
https://www.nytimes.com/2020/11/27/business/economy/india-economy-covid-19.html
“India was expected to really step into China’s shoes and give that additional boost to globalization that was missing,” said Priyanka Kishore, head of South Asia at Oxford Economics. “And that’s where India didn’t really play out the role it was largely expected to play, and that role seems to be diminishing more and more.”
------------------
An estimated 140 million people lost their jobs after India locked down its economy in March to stop the outbreak, while many others saw their salaries drastically reduced, the Mumbai-based Center for Monitoring Indian Economy said. As the lockdown was eased, many went back to work, but more than six million people who lost jobs haven’t found new employment.
In a June survey by the All India Manufacturers Organization, about one-third of small and medium-sized enterprises indicated that their businesses were beyond saving. The industry group said that such a “mass destruction of business” was unprecedented.
-------
Just a few years ago, India, with a population of 1.3 billion people, was one of the world’s fastest-growing large economies. It regularly clocked growth of 8 percent or more.
Global businesses began to warm to the idea of India as a potential substitute to China, both as a place to make goods and to sell them. China’s costs are rising, and its trade war with the United States has complicated doing business there. The Chinese Communist Party is increasingly intruding into business matters, and local Chinese competitors have upped their game against international brands.
But India’s economy was facing headwinds well before the pandemic. Between April and December 2019, G.D.P. grew only 4.6 percent.
-------
One of Mr. Modi’s policies, called demonetization, banned large currency notes overnight in an effort to crack down on tax avoidance and money laundering. Under another, India replaced its welter of national and state taxes with a single value-added tax, in part to cut down on corruption among tax collectors.
Mr. Modi also increasingly turned India’s industrial policy inward, which many economists say has hurt overall growth. The country has long nurtured some of the steepest trade barriers of any major economy, to help its domestic industries develop. Mr. Modi added to that in areas like electronics. His government has also tightened rules around e-commerce, to assist Indian businesses that compete with companies like Amazon and Wal-Mart.
“The slowdown,” said Ms. Kishore, “is almost homegrown.”
