The signs are all around us. The Indian economy, once hailed as a fast-growing giant, is now showing worrying signs of a slowdown. If you’ve felt that business isn’t the same as it was last year, the data backs up that intuition. Here are eight data points that illustrate just how severe the situation is:
1️⃣ In September, car sales fell by 19% YOY: A sharp drop in car sales indicates declining consumer confidence. Cars are often seen as a barometer of the economy’s health, and such a steep decline is alarming.
2️⃣ In April-August, diesel sales rose just 1% YoY: Diesel is a lifeline for transport and industry. A meager 1% growth in sales reflects a significant slowdown in industrial and transportation activities, signaling a sluggish economy.
3️⃣ Services Purchase Manager’s Index (PMI) fell to 57.7 in September – A 10-month low: The services sector, which accounts for over half of India’s GDP, has hit a new low. A falling PMI suggests reduced demand in critical sectors like IT, banking, and tourism.
4️⃣ Manufacturing Purchase Manager’s Index (PMI) hit 56.5 in September, down from 57.5 in August – An 8-month low: This drop highlights the slowing pace of factory output and reduced demand in the manufacturing sector, an area vital for job creation.
5️⃣ Home loan disbursement down 9% in Q1, and auto loans up by a mere 2%: Declining home loan disbursement and stagnant auto loan growth point to weakened consumer spending and economic uncertainty, especially in real estate and automotive sectors.
6️⃣ Growth in GST collections fell to 6.5% – the lowest level in 40 months: GST collection growth is now barely in line with inflation. This is a clear sign that consumer spending, which fuels GST revenue, is declining at an alarming rate.
7️⃣ India’s merchandise exports declined to $34.7 billion in August from $38.3 billion last year: Declining exports indicate weakening demand for Indian goods globally. With inflation, geopolitical tensions, and global recessions in play, India’s export market is taking a hit.
8️⃣ Index of Industrial Production (IIP) turned negative for the first time in 3 years in August: The IIP, which measures output in eight core sectors like coal, oil, and electricity, went into negative territory, signaling a contraction in industrial output for the first time in years.
Indian Economy Slowing Down Rapidly : The Real-World Impact
One doesn’t even need to dive into numbers to feel the pinch. Talk to any business owner, and they’ll confirm that markets aren’t what they were last year. Everyone across industries—from small shops to large corporations—is feeling the slowdown.
What makes this worse? While the economy slows down, the government’s direct tax collections are zooming.More of what people earn is going to the government in taxes, leaving less for businesses and consumers to spend, stifling the economy further.
This puts pressure on the government to take steps to revive the economy. Unfortunately, the burden to boost growth cannot fall entirely on government shoulders. The private sector, disincentivized by high taxes and low demand, has been hesitant to invest further.
A Worrying Trend Over the Past 7+ Years
This slow but steady economic decline has been a trend for over seven years. Despite claims of strong growth, data repeatedly shows that key indicators like manufacturing output, consumer demand, and exports are struggling. The continued focus on tax collection and regulation adds pressure to the private sector, further slowing investment.
This brings us to the big question: Why aren’t more business journalists addressing these issues?
The media seems reluctant to tackle such uncomfortable truths, choosing instead to focus on optimistic or superficial news. Many business leaders and citizens feel that traditional media is not reflecting the reality on the ground, resulting in an erosion of trust.
The Disconnect Between Media and Reality
For many, the daily headlines about economic growth don’t align with the hardships faced in reality. This growing disconnect between the actual state of the economy and what is portrayed in the media is causing frustration.
Business owners, workers, and even consumers are left wondering why mainstream media outlets shy away from addressing such critical issues. Instead of investigative reports on the economy’s struggles, we see polished stories that fail to acknowledge the growing problems in consumer demand, manufacturing, exports, and loans.
Time for Action
The data is undeniable: The Indian economy is slowing down. From car sales to GST collections, the economy is facing challenges that cannot be ignored. The government needs to take proactive steps to revitalize sectors like manufacturing, exports, and consumer spending. Additionally, more pressure should be placed on reducing tax burdens to incentivize private sector growth.
At the same time, it’s time for the media to step up and ask the tough questions. If the economy continues on this path, the consequences could be severe, affecting employment, growth, and stability in the years to come.