As the recently released government data shows the GDP growth rate hitting a six-year low, we examine what it is and how it affects the lives of students.
When the National Statistical Office released its official data showing the growth rate of the GDP in the first quarter of the financial year was only 5%, it was perhaps a wake-up call for a lot of us. But the truth is that the economy has been dwindling for a while now. The current GDP growth rate has hit a six-year low and its effects reach far and wide.
There is a slowdown in consumer demand, a decline in manufacturing, and rising global trade tension creating a vicious cycle in the Indian market.
Private consumption, which contributes nearly 55-60 percent to India’s GDP has been slowing down. This is due to demonetization as consumers now prefer to hoard cash or keep it in the bank instead of spending it. Demonetization has also led to small and medium businesses to withhold investment since they too operate on cash, which they are currently facing a dearth of.
The most important factor here, perhaps, is that there is also a global economic slowdown that is happening and given the fact that India is primarily an exporter, there has been a slump. Thus, it can be said that the ongoing global crisis also has contributed to this slowdown.
And while the economic slowdown seems like a topic far away from our carefree lives as students, its indirect effects have started to seep in.
This slow rate of growth is a huge setback for the country as the country requires an accelerated growth. to employ millions entering the job market every year. Thus, what the slowdown means for professionals and fresh graduates is that they would be finding it harder to land jobs as well as see their salaries rise on yearly basis.
Businesses face the brunt of the slowdown but small start-ups are the ones affected the most. Students often intern with the small start-ups during their free months to boost their experience and gain some extra cash however the opportunity seems unpromising as small companies might choose not to hire in favour of dedicating their funds to keeping their business afloat. Bhavya Pandey, an Economics Honours student from Daulat Ram College also discerns the same and agrees.
Additionally, as the priorities shift to fixing the economy and earning a livelihood, education takes a backseat. Funds to education reduce to get allocated to sectors which give immediate outcome, affecting students, especially those from a lower economic stratum, directly or indirectly. “The economic failure has caused unemployment to rise and hence may affect the stability of the families of students’ belonging to the lower economic strata of the society. Further, students may also miss many opportunities because of lack of funds.” Says Abhinandan Kaul, a student at St Stephen’s.
What is evident is that the economic problems are here to stay for now. How deep its effects run, though, is not something we would get to know precisely anytime soon.
Feature Image Credits: The Economic Times