Praxeology: My Reflexions on India

The Indian, and world economy, is entering in one of the worst phases of modern day recession right now. The warning signs of rapidly slowing Indian economy are everywhere. Auto companies are firing workers at a rapid pace and halting production. Even age old manufacturing company like Parle, which makes famous Parle-G biscuits, is firing 10,000 workers. GDP growth has collapsed and India has slipped to 7 th place, from 5 th previously, in global GDP ranking. The stock market has already lost 4000 points from its pre-budget high level of 40,000. Indian currency rupee has again touched a low of 72 rupees per dollar mark, and it is poised to go even lower. On the other side the precious metal Gold has gone ballistic to near 40,000 rupees per 10 gram level amidst this fear of a slowdown. Most major Indian commercial banks are drowning in debt. Big corporations are drowning in debt and buckling under debt pressure one after another. Amidst this slowdown it is natural t

India’s new and first female finance minister Nirmala Sitharaman in an interview recently   said   , At this stage, what we are looking at is making sure that consumption is encouraged through various steps that we’re taking, actually get the money into the hands of people, rural, particularly. This whole DBT-based transfer of entitlements to those who need to get it and get it instantly, being enabled by technology, was one very big way in which we’re pushing money into the hands of people. As you are spending on infrastructure, in-situ promotion of labour is what is happening. Giving money they need in their hands instantly is what is needed. So if government’s expenditure is diverted to only prioritising on infrastructure, the ripple effect, I expect, will be on labour, everywhere rather than concentrated in one place…The virtuous cycle kicks in from there. Consumption increases, demand increases, investment increases, as a natural course. Is Sitharaman right in saying tha