{"id":12419,"date":"2021-07-16T12:49:59","date_gmt":"2021-07-16T07:19:59","guid":{"rendered":"https:\/\/triumphias.com\/blog\/?p=12419"},"modified":"2021-07-16T12:49:59","modified_gmt":"2021-07-16T07:19:59","slug":"indias-declining-rural-income-pulls-downs-global-economic-growth-imf","status":"publish","type":"post","link":"https:\/\/triumphias.com\/blog\/indias-declining-rural-income-pulls-downs-global-economic-growth-imf\/","title":{"rendered":"India\u2019s declining rural income pulls downs global economic growth: IMF"},"content":{"rendered":"

Relevance : <\/strong><\/span>
\nG.S paper III: INDIAN ECONOMY<\/strong><\/span><\/p>\n

\"India's<\/p>\n

There is no ebb in India\u2019s economic woes. In its latest assessment, International Monetary Fund (IMF) has cut India\u2019s economic growth forecast to 4.8 per cent.<\/p>\n

In its World Economic Outlook, IMF did the same for global economic growth \u2014 to 2.9 per cent for 2019, a downward revision of 0.1 percentage point from its earlier forecast.<\/p>\n

\u201cThe slight downward revision of 0.1 per cent for 2019 is owed largely to downward revisions for India,\u201d the IMF said on January 20, 2020.<\/p>\n

On the other hand, the IMF estimate attributed dipping rural income in India as the main reason for the country\u2019s economic growth floundering.<\/p>\n

What it means<\/strong><\/p>\n

India\u2019s rural income, by its sheer size, has impacted overall global economic growth.<\/p>\n

Rural income comprise close to 46 per cent of the total income of the country with the world\u2019s second-largest population.<\/p>\n

A recent National Statistical Organisations survey on consumption expenditure showed a\u00a010 per cent drop\u00a0in rural expenditure in the country. The survey though was buried by the government.<\/p>\n

\u201cThe biggest contributor to the revision is India, where growth slowed sharply owing to stress in the non-bank financial sector and weak rural income growth,\u201d said Gita Gopinath, the chief economist of the IMF.<\/p>\n

Earlier, Ramesh Iyer, managing director of Mahindra Finance, in an opinion piece on the IMF website wrote that emerging economies\u2019 growth would mostly come from consumption in rural areas.<\/p>\n

Accoridng to Iyer\u2019s piece: \u201cConsumption per capital in rural areas is slated to grow by 4.3 times in just 10 years\u201d.<\/p>\n

Skewed distribution<\/strong><\/p>\n

However, Oxfam International, a non-profit in its annual wealth distribution report has said that India\u2019s bottom 50 per cent population recorded a wealth growth of just 3 per cent in comparison to the last financial year.<\/p>\n

This segment largely includes India\u2019s rural poor. India\u2019s top 1 per cent population income-wise registered a wealth growth of 46 per cent, according to Oxfam International.<\/p>\n

Besides dipping income from agriculture that employs close to 50 per cent of rural workforce, wage rate for rural India has been declining consistently in recent years.<\/p>\n

Last September, it came down by 3.8 per cent. Given the food inflation picking up, it means that rural poor must be spending less and less.<\/p>\n

And since 2010-11, India\u2019s economic growth has largely been fuelled by consumption expenditure; accounting for 59 per cent of its growth.<\/p>\n

If rural India continues to register low rate consumption expenditure, the national economy would reflect it in low economic growth. And for the world economy, as the latest IMF forecast suggests, it would be again bad news.<\/p>\n","protected":false},"excerpt":{"rendered":"

Relevance : G.S paper III: INDIAN ECONOMY There is no ebb in India\u2019s economic woes. In its latest assessment, International<\/p>\n","protected":false},"author":1,"featured_media":12088,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[42,844,1038,43],"tags":[],"class_list":["post-12419","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-studies-iii-technology-economic-development-bio-diversity-environment-security-and-disaster-management","category-gs","category-gs-mains","category-indian-economy"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/12419","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/comments?post=12419"}],"version-history":[{"count":1,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/12419\/revisions"}],"predecessor-version":[{"id":12420,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/12419\/revisions\/12420"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/media\/12088"}],"wp:attachment":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/media?parent=12419"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/categories?post=12419"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/tags?post=12419"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}