What can India do to overcome the global slowdown? (Indian economy struggling with demand slowdown)

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 What can India do to overcome the global slowdown? (Indian economy struggling with demand slowdown)

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• FIRST PERSPECTIVE - NAGESH KUMAR

1. A synchronised global slowdown is here (IMF report), probably triggered by trade slowdown.
2. World Bank estimate for trade growth is 1.2% only, so it's anaemic. Globalisation will ensure all get affected!
3. US-China trade war is spilling over for others.
4. Indian economy is affected through not just global trade, but also capital inflows.
5. The 2018 NBFC crisis affeted credit flow to capital goods. That demand is down, car sales are down, real estate is in trouble.
6. We need fiscal stimulus now, not fiscal consolidation. Public investment is the key.
7. Cash in hands of poor will instantly help. Corporate tax cut is a medium term solution.
8. West is flat, while East is dynamic today. RCEP can be good for India, as India may get integrated into east-Asian value chains.
9. Sadly, till date, Indian industry hasn't made use of various agreements (preferential market access, etc.). Our large domestic market was too lucrative. A weaker rupee is needed for exports.
10. Our trade policies need to be consistent. With onions, we put the MEP (minimum export price norm) when prices shot up, so that local prices are contained. It is avoidable, via better reserves management.
11. In pharma and auto sectors, India is very competitive.

• SECOND PERSPECTIVE - N R BHANUMURTHY

1. Slowdown commenced in 2018 largely due to premature withdrawal of post-2008 stimulus.
2. Emerging markets became weak - Brazil and South Africa are in recession.
3. China started slowing - was it deliberate (to avoid overheating)? Sadly, India isn't immune now, like it was in 2008.
4. From Q2 of 2018, experts warned of a slowdown, but the govt. accepted it in Q3 of 2019!
5. India faces headwinds from both domestic and global reasons.
6. RBI report shows a collapse in non-food credit to commercial sector (Apr to Sept). Our GDP will not exceed 6%, and slowdown is deepening.
7. US-China trade war could have helped us, but we put import tariffs when we should've reduced them.
8. RCEP will be not good for India, and even the govt. isn't sure of how various trade deals have worked for India till date. China will come crashing into India post-RCEP.
9. Many industries left India and went to B'desh or Vietnam (for textiles). Let us set our house right.
10. China's manufacturing competitiveness makes it able to sell worldwide. India is unable to do so. India just can't compete with RCEP due to low social capital, and poor productivity.
11. IMF says that - (a) increase domestic finance, and (b) improve governance. Good ideas.
12. Merging banks not a good idea as we need more banks, not less.

• Summary : Two perspectives on India's response to a global slowdown, in a year when IMF expects global growth to be just 3%

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