2016: India’s Economy Starts with a Bang but Ends in a Whimper

Demonetisation Mess Set to Spill Over to 2017

India’s economy was booming when 2016 unfolded, but what started with a bang is ending in a whimper, thanks to Prime Minister Narendra Modi’s ill-conceived and poorly executed ban on big notes that has so far left around 120 people dead and millions jobless.

This Bloomberg report, carried by Singapore’s Business Times today, says “India started 2016 as the world’s fastest-growing major economy, but at its end the nation faces a significant slowdown and the delay of what’s been hailed as Prime Minister Narendra Modi’s greatest reform — the creation of an integrated marketplace.”

GST is Brainchild of Dr Manmohan Singh Government

There is a minor inaccuracy here – the “greatest reform” it raises is not actually that of Modi’s, he was merely set to usher in the GST era, with the framework for it put in place by the Manmohan Singh government.

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But it is right in pointing out that “Demonetisation has sucked momentum from the movement to roll out India’s goods and services tax from April 1. Hailed as one of biggest reforms in generations, the GST will replace a myriad of consumption and sales levies imposed by various states and is expected to boost competitiveness and investment.”

https://www.bloomberg.com/news/articles/2016-12-26/modi-own-goal-swamps-india-s-big-bang-year-clouds-2017-outlook

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G Joslin Vethakumar

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