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India is one of the world’s fasting growing economies. It had been touted as an economic and geopolitical counterweight to China. But recently its growth fell to its slowest pace in six years. Investment has weakened, and unemployment has risen.So what’s causing the slowdown, and how can it be reversed?Since the turn of the century, India’s economy has grown at a rapid rate,helping transform the country.Between 2006 and 2016, rising incomes lifted 271 million people out of poverty, meaning the proportion of Indians still living in poverty has fallen dramatically, from around 55% to 28%.Access to electricity has also improved.


In 2007 just 70% of the population had accessto power. By 2017, that grew to nearly 93%.More recently, the Indian government constructed around 110 million toilets -- a huge step towards better sanitation designed to prevent the practice of open defecation. It''s a signature program of Prime Minister Narendra Modi, known as Swachh Bharat, or Clean India.All this development has been supported by a booming economy, but as of late, that expansion has begun to run out of steam. In the third quarter of 2019, India’s economic output grew by 4.5% - making it the first time the country’s growth dipped below 5% since 2013. For context, 4.5% growth is still much higher than that of developed economies like the U.S.,


But with 12 million Indians entering the workforce every year, economists say the country needs annual growth rates to stay above nine percent to ensure there are enough jobs.So, what’s causing this recent slowdown?Well, government officials argue turbulence in international financial markets is at fault.Political uncertainty and  U.S.-China trade tensions  mean confidence levels among investors and consumers everywhere have sunk.


It employs about 35 million people and makes up about 7% of India’s GDP. Last summer,
the industry suffered its worst sales performance in nearly 19 years, and reports suggest tens
of thousands of workers have been laid off.The agriculture and construction sectors have also been hurting, with small and medium businesses being hit the hardest.


The country’s unemployment rate has been on an overall upward trend since July 2017,
rising several percentage points to 7.7%.Higher unemployment means consumers are buying less, leading to the unfortunate cycle of slower manufacturing, production, investment and job creation.A survey from the Reserve Bank of India found consumer confidence has fallen to its lowestlevel in five years. But Indians still have a positive outlook for the future, with most consumers expecting to feel more optimistic in a year.


However, if things don’t improve, debt could become another issue. Expecting better days ahead, many households have continued to spend, by taking out loans and dipping into savings.Household savings as a proportion of GDP has fallen from 23.6% to 17.2%. Meanwhile, household debt has surged to 10.9% during the same period.


Critics say the government in New Delhi has failed to spot these risks and hasn’t done enough to get the economy moving again.The Reserve Bank of India''s former governor Raghuram Rajan recently blamed the lack of significant reforms since the global financial crisis.Even the country’s chief economic advisor recently admitted reforms are needed to make India more friendly to investors. India has cut its corporate tax rate,but labor and land laws are still extremely strict. He also says the country needs to become pro-market, rather than just pro-business, to avoid costly government bailouts of failing sectors.


The country''s shifting export policy has harmed several of its largest industries, particularly clothing.India''s share of the global apparel market has increased only slightly in the past 20 years.
And though the Indian workforce is vast, both Bangladesh and Vietnam now export more.On top of that, the country’s import tariffs on average are much higher than the world’s biggest economies. They’re also among the highest of the world’s emerging economies.Even U.S. President Donald Trump has called for the country to bring down its duties.


But let’s take a step back. Has India’s growth actually slowed as much as we think?The government’s former chief economic advisor Arvind Subramanian caused a fair bit of controversy in June 2019, when he claimed the country’s official stats probably overstated GDP growth by 2.5% from 2011-2012 to 2016-2017. He says the bottom line is that India never recovered from the global financial crisis. The government denies this.

不过让我们先后退一步,印度如今的经济增长真如我们想象得那么慢吗?印度政府的前任首席经济顾问Arvind Subramanian在2019年6月发表的讲话引发了不小的争议,他声称印度的官方统计数字很可能夸大了该国在2011-2012年以及2016-2017年期间的gpd增长率(提高了2.5%)。他还指出,最为关键的是,印度从未从全球金融危机中恢复过来。然而印度政府否认了他的观点。

But none of this has hurt Prime Minister Modi at the polls -he won by a landslide in the most recent election. So how will he keep his promise and double the size of the economy by 2025?Many economists insist a well-explained economic vision would help. As would more long-term investment, better skilled workers and improvements to infrastructure.It may not matter who or what is to blame for India''s recent economic challenges, but bottom line - India''s economic growth needs to bounce back, and fast.