If 2015 was the worst year for the Bharatiya Janata Party and Prime Minister Narendra Modi politically, the year 2017 is turning out to be their worst as far as the economy is concerned.
The demons of demonetisation played a critical role in slowing down the economy in the fourth quarter of the last fiscal (January-March 2017) and the first quarter of this financial year. Just when the economy started recovering from the big-bang disruption of the cash ban, uncertainty and massive destocking carried out in June by companies ahead of the rollout of the goods and services tax, from July, took it down further.
Incidentally, the country’s gross domestic product growth decelerated to 5.7 per cent in the first quarter. On top of that, resolution of bank non-performing assets is in progress, and until full cleanup is done, private lending and investment are not expected to take off. First-quarter numbers also showed how manufacturing has done poorly.
We sat down with our editorial director R. Jagannathan to talk about the slowdown in growth and the stimulus package that can help revive the economy.