Are We Really Heading Towards An Economic Slowdown??

Heading towards the Economic Slowdown??

By- ISHANK RAVI | TheLearnEarn | 15/09/2019

This blog is about the present economic situation and factors responsible for the slowdown in financial market, but before getting into economic slowdown also known as recession let us understand what exactly an economic slowdown is? To understand this better lets go through the short and crisp definition of the word Slowdown. Slowdown in respect to economy means applying breaks on consumption, construction, manufacturing and investment these are the four most important factors responsible for economic slowdown. 

The budget (Bahi Khata) 2019 presented by the central government is a true example of how this disappointed the whole economy domestic and internationally.

Tax imposed on Foreign Investment Institutions (FIIs) has drastically changed the whole investment approach which leads to heavy withdrawals from the markets. 

The current situation is only supported by the powerful inflow from the monthly SIP deposited by the retail customers. But is this all what we are facing??

No, not only this, in the recent past many factors like decline in the sale of automobile industry, 7000 Crore invested in public sector banks, a whooping Rs.1.76 Lakh Crore loan from the RBI reserves and many other factors simply ask a very genuine question that "What the economy thinks' of Sitharaman's Bahi Khata?

(From left)  MoS for Finance Anurag Thakur and Finance Minister Nirmala Sitharaman, New Delhi.

The answer is very polite and clear that the present budget should not only focus on agricultural or Rural India but the Urban and upper middle class should also be an integral part of the budget. It should also offer some sweet to the upper and middle income group. But the present situation tells a different story. All the bitter medicines are for upper and middle income group and rest are just a part of it. This kind of mind set will never give a fruitful result; the government should have a key note on it.
Taking all this into account one cannot ignore the cyclical nature of the economy which tells us that economy never runs on a flat pitch its turf are filled with so many unavoidable bumps.

While discussing all the factors which led to this slowdown we should also find other factors which will again bring the whole economy on track.
Since the central government is taking so many steps to deal with the present situation lets us discuss them as well

(From left) Finance Minister Nirmala Sitharaman, MoS for Finance Anurag Thakur and Finance Secretary Rajiv Kumar, New Delhi (Photo:PTI)

1. A special package will have concrete steps to implement the government’s ambitious plans for Rs.100 trillion infrastructure investments over next five years.
2. Center working on measures such as Tax cuts, SOPs for specific sectors.
3. The government also announced a slew of measures in three dosages which includes a special window for real estate, export incentives, bank consolidation and sops for micro, small and medium enterprises (MSMEs) and the automobile sector.
4. Steps in line with e-motor vehicles and BS6 vehicles will be a major breakthrough for the automobile sector.

So, we can wrap the whole article by saying that the economy is in tough time but we must collect the hidden gems which will beat the bear market and become the torch bearer for the bulls to step in and remember once the bulls step in they come with a greater force.
A force that has the capacity to take away all the bearishness from the economy.

A brief article will be posted soon in context to the hidden gems of the market.

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