New Delhi: Hit hard by the 5-year low GDP growth and 45-year high unemployment rate of 6.1 per cent, the newly formed Modi government got cracking on Wednesday and formed two cabinet committees to check the declining trend in growth and employment and spur demand as well as consumption. A five-member cabinet panel on investment and growth has several members, including Union Home Minister Amit Shah, Highways Minister Nitin Gadkari, Commerce Minister Piyush Goyal and Finance Minister Nirmala Sitharaman. The Government's other panel, which will look at the unemployment issue – the Cabinet Committee on Employment and Skill Development -- has 10 members. This committee, apart from Shah, Sitharaman and Goyal, has Minister of Agriculture Narendra Singh Tomar, Human Resource Development Minister Ramesh Pokhriyal Nishank, Petroleum and Natural Gas Minister Dharmendra Pradhan, Minister of Skill and Entrepreneurship Mahendra Nath Pandey and ministers of state Santosh Kumar Gangwar (Labour) and Hardeep Singh Puri (Housing and Urban Affairs).
The stupendous success of the Modi government at the hustings with 303 Lok Sabha seats was marred by the news on the economic front. Especially the new job numbers set alarm bells ringing. Finance Secretary Subhash Chandra Garg has already said the slowdown of Q4 could persist in the Q1 of the current fiscal. The numbers were unimpressive. The fourth quarter GDP growth (Jan-March) is at 5.8%, a 17-quarter low while the same day a government report of joblessness pegged it at the highest in 45 years. These macroeconomic figures released last month — GDP growth, unemployment numbers and core sector data — laid bare the enormous challenges the Modi 2.0 team faces in resurrecting the slackening economy and restoring the confidence of investors.
In March the IIP fell to 21-months low. The fourth-quarter GDP growth for 2018-19 came in at 5.8 per cent, way below 8 per cent recorded in the same quarter the previous fiscal, lower than the 6.6 per cent growth in Q3. For the entire fiscal 2018-19, the GDP growth came in at 6.8 per cent, lower than the 7.2 per cent growth recorded in the previous fiscal. The core sector data, too, pointed towards a gloomy picture as contraction in crude oil, natural gas and fertiliser output pulled down the aggregate growth rate of eight core infrastructure industries in April to 2.6 per cent. This was much lower than the 4.7 per cent growth recorded in same month last fiscal.