Reports of thousands of people losing their jobs and companies shutting their manufacturing units are giving jitters to the economists and commoners alike, according to Indian media reports. But is India heading towards a recession?
The reports of declining economic activity in India are worrisome, but technically speaking, the recession is not so simple, says Melbourne-based economist Dr Vinod Mishra.
“Negative growth for two consecutive quarters is considered a recession. The situation is not that bad. GDP is still growing positively; although it is much less than the earlier estimates. However, in broad terms, a recession is a significant decline in economic activity. So yes, there is some economic slowdown,” says Dr Mishra of Monash University, Melbourne.
Many sectors in India are feeling the heat of the decline in economic activity.
The auto sector is one of the worst hits.
According to the data released by the Society of Indian Automobile Manufacturers (SIAM), 200,790 lesser units of passenger vehicles were sold to car dealers in July 2019.
It is 30.9% lower than the same period in the previous year. The sales of automobiles in India declined by nearly 19% in July.
“Decline in the sales of consumer goods happens when the consumers lose confidence in the future,” says Dr Mishra.
“It is worrisome that consumer confidence is low. But it is not India-centric. This is a global trend and depends on various international factors such as US-China trade war.
“Indian economy depends much upon the oil and sanctions on Iran are causing issues," says Dr Mishra.