The challenges facing the Indian economy were one of the much-debated issues during the 2019 calendar year, which also saw in May the return of the Narendra Modi-led government at the Centre for a second term.
Among key policy announcements, Piyush Goyal — standing in for the then finance minister Arun Jaitley, who was ailing — had announced in the interim Budget presented ahead of the Lok Sabha elections an annual income support of Rs 6,000 for farmers with retrospective effect.
A Business Standard report on the then undisclosed National Sample Survey Office (NSSO) report, however, revealed that the country’s unemployment rate in 2017-18 had been at a four-decade high. This report was officially released only after the elections, in the second term of the Modi government.
After returning to power with a huge majority, Prime Minister Narendra Modi set a goal of making India a $5-trillion economy by 2024. Though the goal was hailed by corporate houses, a slowing economic growth rate presented the country with another challenge. India’s GDP growth rate declined in the July-September quarter to a six-year low of 4.5 per cent. Subsequently, Moody’s Investors Service revised its outlook on India’s sovereign rating from stable to negative. Following this, several global agencies lowered their India growth estimates for full 2019-20 financial year.
Here is a list of key events and policy decisions (in chronological order) that made the biggest impact on the Indian economy during 2019:
Interim Budget (Feb 1): Modi govt announces sops for farmers
1 / 11
Piyush Goyal, standing in for an ailing Arun Jaitley, presented the Interim Budget for 2019. He announced an income-tax waiver for those earning up to Rs 5 lakh, besides an annual income support of Rs 6,000 for farmers.
What Finance Minister Piyush Goyal presented hardly had any resemblance with the previous three interim Budgets presented by his predecessors — Jaswant Singh in 2004, Pranab Mukherjee in 2009 and Palaniappan Chidambaram in 2014. No interim Budget in the past had announced a new programme with as huge an annual expenditure outlay of Rs 75,000 crore as Goyal’s scheme, Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), to offer an annual income support of Rs 6,000 per year to all farmer families with a cultivable land of up to two hectares. Read more...
Report on unreleased NSSO jobs data raises alarm (Feb 6)
2 / 11
A Business Standard report revealed that the government withheld an NSSO survey showing 2017-18 unemployment numbers at a four-decade high. After fiercely contesting the findings, the government released this survey after the 2019 elections
The country's unemployment rate stood at a 45-year-high of 6.1 per cent in 2017-18, according to the NSSO's periodic labour force survey (PLFS). The report was at the centre of a controversy after two National Statistical Commission (NSC) members, including acting chairman, resigned alleging the government had withheld the release despite the NSC's approval. Read more...
Nirmala Sitharaman, India’s first full-time woman finance minister, presented the first Union Budget of the Modi government in its second term. She introduced an income-tax surcharge for those earning more than Rs 2 crore a year
In a bid to spur the economy, Finance Minister Sitharaman slashed the rate of corporation tax from 30 per cent to 22 per cent for companies that were not availing of any incentives, and from 25 per cent to 15 per cent for new manufacturing entities.
The government significantly reduced the rate of corporation tax, boosting investor sentiment in the midst of a severe slowdown. Read more...
India opts out of RCEP (Nov 4)
5 / 11
India finally decided to opt out of the Regional Comprehensive Economic Partnership (RCEP), saying the negotiations did not “address key concerns”.
The government on November 4 said India would not join the Regional Comprehensive Economic Partnership (RCEP) deal, adding that doing so would adversely affect its national interest. Read more...
Moody’s lowers its outlook on India’s rating (Nov 8)
6 / 11
Moody’s Investors Service changed its outlook on India’s sovereign rating from stable to negative, saying there had been an increase in the risk that economic growth would remain materially lower than in the past.
On November 8, the third anniversary of the government’s demonetisation decision, global ratings agency Moody’s lowered its outlook on India’s credit ratings to “negative” from “stable”, citing an ongoing economic slowdown, financial stress among rural households, weak job creation, and the liquidity crunch in non-banking financial companies. Read more...
A day after a Business Standard report revealed that a survey by the National Statistical Office had shown consumer spending in 2017-18 falling for the first time in four decades, the central government scrapped the survey report.
The government decided to scrap the National Statistical Office’s (NSO’s) consumer expenditure survey conducted in 2017-18 over “data quality” issues This survey had revealed that the country’s consumer spending had seen its first decline of four decades in 2017-18. Read more...
Labour Code on Industrial Relations Bill tabled in Parliament (Nov 27)
8 / 11
The Labour Code on Industrial Relations Bill, consolidating three laws, amalgamating 44 codes into six and easing retrenchment norms to enable hiring flexibility for businesses, was tabled in Parliament on November 27
The Centre approved the Code on Industrial Relations (IR) Bill, 2019 — considered to be the most contentious labour law amendment. Read more...
GDP growth slows to 4.5% in Q2 (Nov 30)
9 / 11
The economy posted its weakest growth in more than six years during the July-September quarter of the year, mainly on account of weak manufacturing activity
India’s Gross domestic product (GDP) in the July-September quarter of 2019-20 grew at a slow rate of 4.5 per cent when compared with the same quarter a year earlier, and 5 per cent lower than the previous quarter, the data released by the National Statistical Office showed. Read more...
GST collection crosses Rs 1-trillion mark in Nov (Dec 1)
10 / 11
India’s GST collections in November crossed the Rs 1-trillion mark after a gap of three months, growing 6 per cent to Rs 1.03 trillion, aided by festival demand
The government’s goods and services tax (GST) collections recovered to a seven-month high in November, crossing the Rs 1-trillion mark on account of festive-season demand and anti-evasion measures taken by the government. Read more...
The rate of CPI-based inflation jumped to 5.54% in November, compared with 4.62% the previous month
Consumer price index (CPI)-based inflation rose to a 40-month high of 5.54 per cent in November when compared with the same month the previous year. Vegetables, which became costlier in neighbourhood markets, contributed the most to lift the headline number. Vegetable inflation in November touched 30 per cent in villages and a staggering 48.6 per cent in cities and towns, data from the National Statistics Office (NSO) showed. Read more...