ABSTRACT
Economic slowdown generally occurs when there is a widespread drop in spending. This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, or the bursting of an economic bubble. In the United States, it is defined as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales". In the United Kingdom, it is defined as a negative economic growth for two consecutive quarters. The economic slowdown in India means hardship for Indians. It has reported on dropping incomes as well as tight-fisted spending, even on essentials such as food. However, it is not only Indians who are suffering in the Indian government too. Taxation is a core part of the capabilities of any government; this is a troubling sign for India. This is doubly worrying for a poor country such as India, where state spending is key to lifting people out of poverty. A leading dampener is the US-China trade war, which has intensified over time and has contracted world trade and, in turn, Indian exports. Also, high rates of GST, liquidity crisis in NBFCs, and shift in the behavioral pattern of the workforce due to the entry of young people have discouraged savings. Governments usually respond to slowdown by adopting expansionary macroeconomic policies, such as increasing money supply or increasing government spending and decreasing taxation. This article examines the causes and consequences of the present economic slowdown in the Indian Economy.
Keywords: Economic Crisis, slowdown, Indian Economy, GDP.
Received : 03rd January 2020
Accepted : 15th January 2020
Published : 15 th February 2020