There are no new investment proposals in India dents the overall economy due to the nationwide lockdown imposed. According to the Centre for Monitoring Indian economy, a Mumbai based organization says that the new investments are dipped badly after lockdown.
The CMIE also noted that this is the lowest investment in the past two decades, where most of the recent acquisitions by government agencies. The private sector investments are badly dented and become 328 billion. This situation is called development troubling as new sector investment never goes down under 5 trillion since 2004.
This will change if the central government makes some large investments into infrastructure. The problem starts after the first nationwide lockdown in April and continues over the next few months. Many other reasons are also there like millions of people lost their jobs during the lockdown, and many private-sector startups are shut down.
Economists and experts all around the world believe that a sudden economic stop caused by coronavirus will lead to a global recession in 2020. It is advised to focus on a sustainable business model rather than relying on investors. The fall in revenue will put extra pressure to make its presence every day.
How Can We Get The Growth Back On Track?
The COVID-19 nationwide lockdown was exceptionally challenging times when the economy was decelerating. As we all know that the average growth is around 7% in earlier years as it comes under 4% after post-lockdown. Several factors have a remarkable role in India’s growth as most of the Indians are growing working-age. The growing savings and investment rates continued to late 2020, as the financial sector continues to proliferate.
International Monetary Fund (IMF) predicts India’s economy by 4.5% in the financial year 2021; the extended lockdown results in a slow economy. The pandemic has a negative impact that also makes uncertainty to forecast the economy in the year 2020. The latest assessment also indicates that India will reach a 6% growth in the year 2022. The economic recovery will be slow, and there is no sign of improvement in the near future as per increasing unemployment.
The Indian Economy Will Slow Down Because These Sectors Suffer
1. Automobile Sector
No sale for these high-quality electronic goods such as cars, TV, Refrigerator, etc., as there is a higher production of all these goods. If a family has bought a new car, he does not think to buy a car for another six years. India There is also a business of luxury cars, is also goes down due to low capital. Daily car production in India by 25000 as there is more than one crore car lying in Indian warehouses. The government is improving public transportation in many cities. E.g., they do very well. Why should they buy a new vehicle in these crowded cities and stuck in the traffic?
2. Real Estate
Here the real-state business has played an important role, and all the corrupt black money lying in the archives came out of the broadcast. People need to understand that commodity prices are directly related to the average person’s income. Today in any metropolitan area, a person with a salary of 1 lakh per month cannot buy even a two BHK flat for 800 carpet space.
That in itself should have been a warning sign in the dipping of real-state business. The situation today is no different from the removal of the engineers. All the projects have been suspended. Indians should understand that a residential and non-investment home does not exist when land prices rise sharply in a short period. So the real sector can re-emerge if apartments are sold at 50% cheaper than the current market rate.
Many economists also blame demonetization along with the rollout of GST. Much private banking sector is going under non-performing as the economic slowdown starts. People who are working in the informal sector lost their jobs after demonetization occurs. So, all these things are equally responsible for the drastic economic slowdown, and it takes some time to back on track. The business and private sectors are slowly getting back on track that indeed helps in recovery.