Modi Hai to Mumkin Hai : D-Street lost Rs 12,00,000 crore in first 50 days

New Delhi, 24 July 2019 [Fik/News Sources]: In Modi 2.0 contrary to the market expectations, Indian economy is facing a slowdown in all quarters—consumption, private investment and exports.

Slowing growth is a problem for an economy that aspires to acquire a size of $3 tn this year.Investors expecting a shift in market momentum following the second mandate for Modi government in the recent Lok Sabha elections are in for disappointment.

A weak global and domestic demand has exacerbated the situation. India has lost the status of being the fastest growing big economy in the world as growth slipped to 5.8% in the fourth quarter (vis-a-vis China’s 6.4% growth in the March quarter) – the lowest in five years, pulling India’s annual growth below 7% for FY19.

Investor sentiments soured in the first 50 days of Modi 2.0, with stock investors losing nearly Rs 12 lakh crore worth of wealth within a short period.

Although, the Modi government has underlined its priorities in the first 50 days of its second term, setting sights on making India a $5 trillion economy and hitting the ground running on spurring growth, the task seems getting out of the hand.

Just days after coming to power, the government spelt out its key priorities in the budget which was focused on laying the foundation for making India a $5 trillion economy and doubling farmers’ income, however on ground the situation seems murky. Slowdown in consumption, the biggest component in aggregate expenditure, is worrying. Several indicators show a slowdown in private consumption.

Petroleum products consumption fell from 5.9% YoY growth in 2017-18 to 2.65% in 2018-19. FMCG grew at 13.6% in the fourth quarter, at least 2.3 percentage points lower than December quarter. Passenger vehicle sales grew at 2.7% in 2018-19, the slowest in five years. The credit to select sectors like power, roads and PSEs is down. Domestic air traffic fell by 4.2% in April 2019.