As Abdul Kalam’s vision of making India a global superpower by 2020 fails to materialise amid nationwide unrest, economic slowdown, and rising poverty statistics, Prime Minister Narendra Modi has now turned to India’s private sector to inspire economic growth.
Yesterday on January 6, PM Modi met executives from Indian companies to discuss the state of the Indian economy and the need to create more job opportunities. Some of the iconic business leaders present at this meeting were Reliance Industries chairman Mukesh Ambani, Tata’s chairman emeritus Ratan Tata, Chairman Bharti Airtel Sunil Bharti Mittal, chairman and founder of Adani Group Gautam Adani, Mahindra group’s chairman Anand Mahindra, and Vedanta Resources’ Anil Agarwal.
Along with these, chairman of Tata Sons’ N Chandrasekaran, Venu Srinivasan of TVS and head of L&T AM Naik were also present at the meeting.
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Earlier in December 2019, the prime minister had also set up a meeting with representatives from startup ecosystem including venture capitalist Mohandas Pai, chairman of Indian Angel Network Saurabh Srivastava, Intel’s Nivruti Rai, chief executive of Tata Consultancy Services Rajesh Gopinath, and founder of Practo Shashank ND, among others.
India Battles Economic Crisis
In the third quarter of 2019, India’s GDP growth was reported to be 4.5% as compared to a 5% growth rate in Q2 2019. India’s GDP growth has been continuously falling for the past seven quarters and has now hit a six-year low. What’s more alarming are the predictions of a further slowdown in the fourth quarter of 2019.
According to an independent data research body Centre for Monitoring Indian Economy (CMIE), India’s unemployment rates are currently standing at 7.7%, as compared to 6.86% in January 2019. Also, the labour participation ratio had hit 42.4% in November 2019 and is now expected to drop lower with ongoing uncertainty around the citizenship status of Muslims who make about 39 Mn of India’s workforce (out of 405 Mn employed people).
The automobile sector too reported a drop in sales over the past year because of the country’s uncertain emission norms and push for electric vehicles adoption. FMCG sector saw a severe slump as well, given the slowdown in the agriculture sector, liquidity crunch, and fall in employment, according to a Credit Suisse report.
Amid these circumstances, the Indian government has been constantly betting on the country’s entrepreneurs to find innovative solutions to the dampening economic growth. These efforts included a 25% reduction in corporate tax, setting up a startup fund of funds to aid startup investments and PM Modi’s recurring appeals to global investors, among other initiatives.