ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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A Low Growth, No Employment and No Hope Budget for ‘Aspirational India’

The Union Budget of 2020 is conspicuous by its non-recognition of the ongoing and widely discussed slowdown of the economy, let alone its impact on the different sections of the people. Given the negative growth in employment and consumption in the rural economy, the budget seems like a cruel joke on the plight of the poor, in general, and women, in particular. Instead of measures for boosting the aggregate demand, especially in the rural economy, the government has exhibited a track record of aiding the process of wealth creation for corporate capital and throwing a few crumbs to the middle class. What comes out crudely and sharply is the ideological predilections of the regime in power.

Some Analytics of Demonetisation

Given the difficulty of a reasonably rigorous assessment of the long-term effects of demonetisation, its macroeconomic consequences in the short run are analysed. Standard macroeconomic tools are moulded for this purpose. It is found that there is a fall in demand as well as in supply-constrained output.

Consequences of the War for Global Economy

Unlike the past history of world capitalism when war could be expected to boost demand and real economic growth, the current scene is more complex. Even if the most optimistic expectations of global expansion of demand are fulfilled, government intervention on a much larger scale in the international markets would be required to channel financial flows to the creation of real assets instead of speculative activities. The prospects could be much more dismal if demand fails to pick up.
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