{"id":2147,"date":"2019-08-29T16:31:17","date_gmt":"2019-08-29T11:01:17","guid":{"rendered":"https:\/\/www.classiciasacademy.com\/blog\/?p=2147"},"modified":"2024-06-06T15:39:19","modified_gmt":"2024-06-06T10:09:19","slug":"hardly-the-brick-and-mortar-of-a-revival","status":"publish","type":"post","link":"https:\/\/www.classiciasacademy.com\/blog\/hardly-the-brick-and-mortar-of-a-revival\/","title":{"rendered":"Hardly the brick and mortar of a revival"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><strong>The transfer of a surplus of around 1.76 lakh crore from the reserve bank to the government.<\/strong><\/h3>\n\n\n\n<p><strong>Crisis in the automobile\nindustry:&nbsp;<\/strong><strong><\/strong><\/p>\n\n\n\n<ul>\n<li>The automobile sector provides employment to more than 35 million people\nand is one of the largest employers in the Indian economy.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>It has also been perhaps the worst affected sector in the\nslowdown. 350,000 workers have been laid off by the automakers.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>The very popular biscuit brand &#8211; Parle &#8211; has been struggling with low\ndemand. It is planning to lay off 10% of its workforce.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>The low demand was driven by the burden of GST on the small\nbiscuit packets.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>The fast-moving consumer goods sector had seen a quarterly growth\nof 10% in the last quarter.<\/li>\n\n\n\n<li>The fast-moving consumer goods are those goods which are sold at a\nlower rate and relatively quickly.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>They are also called as Consumer Packaged Goods (CPG) as they\nmostly consist of packaged household goods which are non-durable. Ex: Soaps,\npackaged food etc.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>In the current scenario, owing to the low demand, soap, tea and\nsnacks are among the worst-performing consumer packaged goods.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Understanding the low\ndemand:<\/strong><strong><\/strong><\/h4>\n\n\n\n<ul>\n<li>In addition to low investment, most industries are facing the\nissue of low consumption and demand.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>The reason for low demand can be attributed to the unequal\ndistribution of overall economic growth in the last few years. A small class of\nelite individuals gained most capital which ultimately rendered the phenomenon\nof jobless growth.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>The failure of\ngovernment policies: <\/strong><strong><\/strong><\/h4>\n\n\n\n<ul>\n<li>Damaging policies with poor implementation have contributed to an\neconomic policy failure of the government.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Both, the step of demonetization and the implementation of GST,\ngave a huge blow to the informal sectors of the Indian economy.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>The damage to the informal economy became visible only later when\na steady decline in output and employment was noticed.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Unemployment has reached a 50 year high between 2011-12 to\n2017-18. More than 15 million job losses have been reported in that period.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>The government has not dealt properly with the issues of declining\nemployment and low demand for consumption. The fiscal stimulus like lowering\ninterest rates should have been provided to address this concern.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>The lack of demand has been a major factor for low investment.\nRegulatory measures and fiscal concessions had been long overdue by the\ngovernment to incentivize investment.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>While the government is having a tough time meeting its revenue\ntargets, the corporate sector is complaining about the government\u2019s desperate\nmanner of tax collection as \u2018oppressive\u2019.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Rural vs Urban distress:<\/strong><strong><\/strong><\/h4>\n\n\n\n<ul>\n<li>In the last few years, a trend of declining wages has been seen in\nthe rural economy. Farmers\u2019 purchasing power has been adversely affected by the\ncrisis in cultivation.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>The situation in urban areas is not good either. The wages in\nurban areas haven\u2019t been able to keep up with inflation.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>On Centre\u2019s response:<\/strong><strong><\/strong><\/h4>\n\n\n\n<ul>\n<li>The government\u2019s response to the crisis is not only late but also\nfails to address the underlying issue of low demand and wage suppression.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>The announcement by the finance minister included the rollback of\nburdensome tax on FPIs and infusion of 70,000 crores into the economy.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>The government is having no long term strategy to help the failing\nautomobile sector as new-generation electrical vehicles are about to take over.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Conclusion:<\/strong><strong><\/strong><\/h4>\n\n\n\n<ul>\n<li>The economy is in shambles. The government seems to be aware of\nthe pernicious danger of the economic slowdown. <\/li>\n<\/ul>\n\n\n\n<ul>\n<li>The measures, however, are neither sufficient nor on point. The\nnewly borrowed 1.76 lakh crore from the RBI is also highly unlikely to bring\nmuch relief as most of it will be used to fill the tax revenue deficit.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>Amid this slew of measure, the rural distress has been unnoticed.\nA boost in rural public expenditure is much needed to generate employment in\nrural areas.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\"><p>The transfer of a surplus of around 1.76 lakh crore from the reserve bank to the government. Crisis in the automobile industry:&nbsp; Understanding the low <a class=\"mh-excerpt-more\" href=\"https:\/\/www.classiciasacademy.com\/blog\/hardly-the-brick-and-mortar-of-a-revival\/\" title=\"Hardly the brick and mortar of a revival\">    [read more]<\/a><\/p>\n<\/div>","protected":false},"author":1,"featured_media":2148,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[170],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Hardly the brick and mortar of a revival - UPSC Current Affairs<\/title>\n<meta name=\"description\" content=\"Hardly the brick and mortar of a revival - The transfer of a surplus of around 1.76 lakh crore from the reserve bank to the government.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.classiciasacademy.com\/blog\/hardly-the-brick-and-mortar-of-a-revival\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hardly the brick and mortar of a revival - 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