New Delhi: The Indian economy may be moving towards a slowdown as the country has off-late witnessed a drop in several key economic indicators, experts said. After a fall in auto sales, a shortfall in collection of direct taxes among others, now household savings in the country too have declined.
In proportion to the gross domestic product (GDP), household savings declined to 17.2 per cent in 2017-18, the lowest rate since 1997-98. According to the Reserve Bank of India’s data, as household savings have declined, these – not corporate demand – have pulled down investments by 10 basis points during 2012 to 2018.
On the direct tax front too, the collections have not been as per the target. Direct tax collections, reported on April 1, fell short by Rs 50,000 crore on account of poor personal income tax collections, thereby failing to meet the revised target of Rs 12 lakh crore for the 2018-19 fiscal. Sources said the target of personal income tax of Rs 5.29 lakh crore was not met by almost the same shortfall amount of Rs 50,000 crore, which dragged down the direct tax collections for fiscal 2018-19.
Sale of passenger vehicles in the domestic market declined by 2.96 per cent on a year-on-year basis in March to 291,806 units, according to data released on Monday. However, during the financial year 2018-19, passenger vehicles sale grew by 2.7 per cent.
Foreign Direct Investment (FDI) into India, which had increased over the past few year, contracted by 7 per cent to $33.49 billion during April-December in the current fiscal, according to Commerce and Industry Ministry data.
With the slowdown in these major economic fronts, economists and analysts say the economy, as a whole, is not in a very good shape. Commenting on the situation, former Chief Statistician Pronob Sen said: “What has basically happened post demonetisation and the GST roll-out, the non-corporate sector has been hit and that is what is showing.”
He was of the opinion that there might be a further decline in the economic indicators, as the non-corporate sector creates the most jobs in India and it has been the most-hit segment. He noted: “It is actually household saving which funds the borrowing needs of government and corporates who don’t have savings.”