Weighed Down

Up until the first half of fiscal 2018/19, the Indian economy was holding on despite the twin shocks of DeMo and GST. At least two of its engines public investment (government investment into infrastructure and development) and internal consumption (goods and services consumed) were still firing on all cylinders. The other two private investment (private sector investment into new projects) and external consumption (exports of goods and services) had gone kaput quite some time back. It was a clear sign that antibodies in the economy were still at work.

Just then, something gave in. Consumption tanked in the second half of 2018/19. Suddenly the 2:2 engine changed to 1:3 as the slowdown began tightening its noose around the Indian economy. The sole engine of public expenditure slowed considerably in the second half and the Centre slammed the brakes on capital expenditure when it realised it had over committed on new schemes such as PM Samman (PM Kisan Samman