Introduction: in exports, the economy remained weak for a

Economic indicators portray the “big-picture” of a country in regards to the economy. One of the most crucial economic indicator is Economic Growth. The reason why its so important is because it means a increase in real GDP; therefore, this means an increase in national income, national output and total expenditure. It will eventually give rise to the standart of living, which will further lead to more consumptions of goods and services. As a result, ‘Holy Grail’ of macroeconomics is used as a term to describe economic growth.
Post Independence, India’s economy in terms of its GDP, has increased to Rs 57 lakh crore in 2014 from mere Rs 2.7 lakh crore in 1950. It has been a huge leap for our country.

But in the following months there are growing concerns that the Indian economy is getting more inclined to head for a serious and prolonged decline in the economic growth, possibly even an economic crash.
 is heading for a serious and a susained decline, possibly even an economic crash.
The Changing Political Rhetoric:
Economic Growth and Economic Development rates- causes and consequences:

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

It has been observed that the Indian economy started going downhill fromt the year 2016. So what could be the possible causes for it?
The Indian Economy has had a steady and a positive economic growth over the past years. However, in the recent months, the Indian Economy is moving towards a downward spiral.
So what was the problem? First, the borad- based slowdown began in June 2016 due to the narrow down of the oil bonanza. Also the slowing down of the- financial services, real estate and business services, since the end of 2015, because of the banking sector.

Second was demonetisation. Major impact of it was on the real estates and financial and business services. But most of its impact was reduced by good monsoons and government spending.

Third, there was a slight economic growth in June 2017, which got pushed off due to the rising imports and slowing exports, which had hurt the overall economic growth in the months following after it. GST also had a huge negative impact on the manufactiong sector.


So in conclusion, it can be seen that due to the low investments and decline in exports, the economy remained weak for a lot of years. Increase in the brent oil prices, which added up for a large part of the increase in growth in 2014-15, had a major part in the decline of the economic growth too. By 2016-17 and the first quarter of 2017-18, the disturbance caused by demonestisation and GST aggravated the decline in the economy.
Also one major reason for the situation is the spiraling fiscal defcit for the first three months of the previous financial year which was already over the budgeted limit of 4.5% of GDP and is currently at arounf 6% of GDP. To finance the fiscal deficit, domestic borrowing and money printing was funded. Both the options made investment crowded out of the public and private sector as well as increasing inflation in the process. A tight monetary policy has been pursued by the RBI, because of the high inflation, along with that the RBI has stopped propping up the government and the rupee as well. It has been observed that the resultant situation has been a case of stagnation and slowdown at a time when energetic responses were needed to the crisis.
All the causes and signs point to the fact- that the Indian economy is on a downward spiral. If immediate action is not taken to recover the economy, then we might be headed for a severe recession in the following months.