ISSUE: WHY SLOWDOWN IN GDP?
According to the data released by the Ministry of Statistics and Programme Implementation (MoSPI), India’s gross domestic product will grow by just 5 per cent in the current financial year (2019-20). Last financial year, 2018-19, the Indian economy grew at 6.8 per cent.
The gross value added (GVA), which maps the economic activity from the income side as against the GDP which maps it from the expenditure side, is expected to grow by 4.9 per cent in 2019-20 as against 6.6 per cent in 2018-19.
What happened to the main drivers of the GDP?
There are four main drivers of the GDP. One, the private consumption expenditure – that is the expenditure that you and I make in our personal capacity. This category has grown by just 5.7 per cent in 2019-20 while it grew by 8 per cent last financial year.
The second driver is the expenditure made by the Government. This grew by 10.5 per cent, which is higher than the rate of growth (9.2 per cent) in the last financial year.
But the most disappointing number is the deceleration in business investments in the economy. This driver, which is the key to sustainable long-term growth, grew by less than 1 per cent; last financial year it grew by 10 per cent.
This shows that while the private consumption demand is tepid, businesses have completely turned off the tap on new investments despite the government making a once-in-generation cut in corporate taxes.
In terms of GVA, which sectors of the economy performed well and which sectors under-performed?
The GVA data provides a detailed picture. Given that the overall GVA has decelerated sharply, almost all sectors have witnessed slower growth in economic activity. Only “Public Administration, Defence and Other Services,“ which essentially measures how the government did, grew by 9.1 per cent. All other sectors saw a GVA growth that was slower than the average growth in the last financial year.
Even so, the sectors which registered growth rate of over 4.9 per cent are, ‘Electricity, Gas, Water Supply and Other Utility Services’, ‘Trade, Hotels, Transport, Communication and Services related to Broadcasting’, ‘Financial, Real Estate and Professional Services’; they grew at 5.4 per cent, 5.9 per cent, 6.4 per cent, respectively.
The worst performing sectors are ‘Agriculture, Forestry and Fishing’, ‘Mining and Quarrying’, ‘Manufacturing’ and ‘Construction’, which are expected to see a GVA growth of 2.8 per cent, 1.5 per cent, 2.0 per cent and 3.2 per cent respectively.
What is nominal GDP and how is it different from real GDP?
GDP is the total market value of all goods and services produced in the economy during a particular year, inclusive of all taxes and subsidies on products. The market value taken at current prices is the nominal GDP. The value taken at constant prices — that is prices for all products taken at an unchanged base year — is the real GDP.
ISSUE: DYING CHILDRENS IN INDIA
WHY IN NEWS?
Nearly 200 children have died in the past two months at the J K Lon Government Hospital in Kota, Rajasthan. This comes barely six months after the death of more than 150 children in an alleged encephalitis epidemic in Muzaffarpur, Bihar. In 2017, more than 1,000 children died in the state-run Baba Raghav Das (BRD) Medical College in Gorakhpur, Uttar Pradesh.
According to the UNICEF’s report, ‘State of World’s Children 2019’, India reported the maximum number of deaths of children under five in the world in 2018. Eight lakh eighty two thousand children under five died that year. That means around 2,416 deaths per day — or seven jumbo jets full of children crashing every day without anyone taking notice.
WHY SO MANY DEATHS?
Most of the children who died in Gorakhpur, Muzaffarpur and Kota belong to the lowest strata of the society. It won’t, therefore, be wrong to conclude that they were victims of structural violence. In India, this structural violence is unleashed through a multitude of social, political and economic factors — apathy of healthcare professionals, poor health services/infrastructure in rural hinterlands, low rates of female literacy, economic inequality, the rigid caste system, social apartheid, lack of political will and patriarchy.
WHAT IS THE SOLUTION?
What is urgently required is not the involvement of private players but a sincere engagement by the state in matters concerning peoples’ health. Reports have shown that most of the babies in Kota died due to suffocation at birth; low birth-weight and infections were the other significant causes of death. These are highly-preventable reasons. The role of the state in delivering health to its people cannot be overemphasised.
ISSUE: IDEA OF 4 DAYS WORK IN A WEEK
Sanna Marin’s Prime Minister of Finland has suggested for a four-day working week.
Editorial highlights that it is not ground-breaking, because a movement for fewer work hours has been building up for years in the more prosperous economies.
But it is particularly thought-provoking because Marin represents the very generation which will live through a massive disruption in the idea of work, brought on by automation, artificial intelligence and concern for the environment. It will alter perceptions of many values of society, including that of identity. The political implications could be immense.
Nevertheless, a head of government in a welfare state supporting the idea of more leisure is a sign of change. As Thorstein Veblen wrote in The Theory of the Leisure Class, “In itself and in its consequences the life of leisure is beautiful and ennobling in all civilised men’s eyes.” The leisure class he studied was built on exploitation, but the technological future could be different.