Thread by @Verity_FinSol

A simple understanding of the slowdown that has gripped us since 2015 (we are discounting all growth numbers put out) #EconomicSlowdown
Demographics bite–India’s Unemployment rate has spiked from 3.5% in 2010 to over 6% in 2018 : some estimates put this no. At over 9% for 2019

Gross Domestic Savings rate as a % of GDP has fallen from 34% in 2010 to 29% in 2018 – FYI we grew from 22% in 1991 to 26% in 1995 and from 28% in 2003 to 34% in 2010 (the so called boom years)
Gross Investment has fallen from a high of 41% of GDP in 2012 to 32% in FY 18

Subsidies remained flat during 2014 – 2018 (marginal increases ) compared to a near 6X increase between 2005 – 13 (putting more money in the hands of the consumer).
STAGFLATION in the Rural Economy between 2014-2019 did not help

No major tax slab change benefits to consumers between 2014-2018, no benefit of Petrol/Diesel rates passed on IN THE HANDS OF CONSUMERS
Personal Consumption demand has grown at ONLY 60% in INR terms between 2014-2019 WHILE it EXPLODED 2.5X between 2004 to 2012

Chicken n egg situation
High Unemployment + lower subsidies + less tax benefits = Lower Consumption = Eats into savings = < Gross Investment = No job creation
Signs were already there in 2013 but we were doing fit-bit
#EconomicCrisis

Solution needed to jump start economy:may include all or a few of the suggestions given below
1) Tax Cuts across Board
2) Petrol / Diesel under GST - essential commodity so 12%-18% slab
3) Let Inflation fly a little say to 6%

4) Risk the Fisc
a) Increase Govt spending in FIXED ASSETS
b) Depreciate Currency (by 10%)
c) Borrow after above depreciation $ 25 billion abroad
for sound financially viable projects immediately
d) Fisc Deficit ON BALANCE SHEET can be allowed

to slip by 1.5%

5) Bit of Monetary Help - 75 bps cut and complete pass through
LETS GO FOR BROKE - we have nothing to loose instead of distractions all the time
6) ACKNOWLEDGEMENT OF THE PROBLEM AT HAND - no defense
Ure view @andymukherjee70 @dugalira #AltSarkar

addendum -
6)India a predominant cash economy : The #MSME n #SME sector r realing under the twin blows of demonitisation n GST - we DO NOT know what's the solution for this but something needs to be done-they can shoot up employment in the unorganised sector
#stateoftheeconomy

7) #RealEstate - builders should not be allowed to hold onto inventory > 1 yr, no renting allowed by BUILDER or it's subsidiary, Triple tax break on housing to consumer
Will lower prices n hopefully millenniums will start purchasing instead of renting

8) a politically sensitive decision - allow individuals ONLY to purchase farm land across India - (whether farmer or not) , be it owned by adivasi/ farmer etc .. yup forest land can still be kept by govt.
OR
This is unused land anyway

Tax breaks to corporates for contract farming : contract farming zilla / village wise

Both measures will lead to income into rural areas
N probably using Skill India train those who sold to set up trade / SMEs

🙏 develop tourism facilities in INDIA
My India is beautiful.Budget clean hotels , connectivity through road/ rail, will lead to huge employment (use skill India to train - from drivers to hotel staff ).States shld use whatever means to shore up facilities
Longer term we know