Topic Of the Day:-“With The Economic Crisis Deepening, The Government Will Have To Hasten Reforms”
There is now no denying that the second Modi government takes office amid a clear economic slowdown. The first macro data set released under the new Finance Minister, Nirmala Sitharaman’s watch, on Friday, showed an under-performing economy with GDP growth falling to 5.8% in the fourth quarter of 2018-19 and pulling down the overall growth for the fiscal to a five-year low of 6.8%. Growth in gross value added (GVA), which is GDP minus taxes and subsidies, fell to 6.6% in 2018-19, pointing to a serious slowdown. If further confirmation were needed, the growth in core sector output — a set of eight major industrial sectors — fell to 2.6% in April, compared to 4.7% in the same month last year. And finally, unemployment data, controversially suppressed by the Union government so far, showed that joblessness was at a 45-year high of 6.1% in 2017-18. These numbers highlight the challenges ahead for Ms. Sitharaman as she sits down to draft the Budget for 2019-20, to be presented on July 5. The economy is beset by a consumption slowdown as reflected in the falling sales of everything from automobiles to consumer durables, even fast-moving consumer goods. Private investment is not taking off, while government spending, which kept the economy afloat during the last NDA government, was cut back in the last quarter of 2018-19 to meet the fiscal deficit target of 3.4%.
The good news is that inflation is undershooting the target and oil prices are on the retreat again. But the rural economy remains in distress, as seen by the 2.9% growth in agriculture last fiscal; the sector needs a good monsoon this year to bounce back. Overall economic growth in the first quarter of this fiscal is likely to remain subdued, and any improvement is unlikely until the late second quarter or the early third. There are not too many options before the new Finance Minister. In the near term, she has to boost consumption, which means putting more money in the hands of people. That, in turn, means cutting taxes, which is not easy given the commitment to rein in the fiscal deficit. In the medium term, Ms. Sitharaman has to take measures to boost private investment even as she opens up public spending again. These call for major reforms, starting with land acquisition and labour, corporate taxes by reducing exemptions and dropping rates, and nursing banks back to health. On the table will be options such as further recapitalisation of the ailing banks, and consolidation. The question, though, is where the money will come from. With tax revenues likely to be subdued owing to the slowdown, the Centre will have to look at alternative sources such as disinvestment. There may be little choice but to go big on privatisation. A rate cut by the Reserve Bank of India, widely expected this week, would certainly help boost sentiment. But it is the Budget that will really set the tone for the economy.
MEANINGS AND WORDS
- denying
Meaning: state that one refuses to admit the truth or existence of.
Tamil Meaning: மறுக்க / மறுதளி
Synonyms: Contradict, repudiate, gainsay, declare untrue, dissent from
Antonyms: confirm
Example Sentence: “both firms deny any responsibility for the tragedy”
- amid
Meaning: surrounded by; in the middle of.
Tamil Meaning: மத்தியில் / இடையில் / நடுவில்
Synonyms: in the middle of, surrounded by, among, amongst, between
Antonyms: surrounding
Example Sentence: “our dream home, set amid magnificent rolling countryside”
- under-performing
Meaning: perform less well than expected.
Example Sentence: “these students are at risk of underperforming”
- pulling down
Meaning: being or appearing below a selected item (such as an icon) in a window overlaying the original view on a computer display
Tamil Meaning: கீழே இழு
Synonyms: Demolish, Destroy
Antonyms: Build, construct, erect, Put Up
Example Sentence: a powerful storm pulled down the old fishing shack, which had been immortalized in countless paintings
- slowdown
Meaning: an act of slowing down / a decline in economic activity.
Tamil Meaning: வேகத்தை குறை
Synonyms: Deceleration, Decline, Delay
Antonyms: Increase, Rise, Breakthrough
Example Sentence: “a traffic slowdown in the passing lane”
- Suppressed
Meaning: forcibly put an end to.
Tamil Meaning: ஒடுக்க
Synonyms: subdue, defeat, conquer, vanquish, triumph over, repress
Antonyms: incite, encourage
Example Sentence: “the rising was savagely suppressed”
- beset
Meaning: (of a problem or difficulty) trouble (someone or something) persistently.
Tamil Meaning: கொடுங்
Synonyms: plague, bedevil, attack, assail, beleaguer, afflict
Antonyms: Calrify, Clear Up, Explain
Example Sentence: “the social problems that beset the UK”
- afloat
Meaning: floating in water; not sinking.
Tamil Meaning: மிதக்கிற
Synonyms: buoyant, floating, buoyed up, non-submerged, suspended, drifting
Antonyms: sunk, sinking
Example Sentence: “they trod water to keep afloat”
- Deficit
Meaning: the amount by which something, especially a sum of money, is too small.
Tamil Meaning: பற்றாக்குறை
Synonyms: Shortfall, deficiency, shortage, undersupply, slippage
Antonyms: surplus, profit
Example Sentence: the amount by which something, especially a sum of money, is too small.
- cut back
Meaning: an act or instance of reducing something, especially expenditure.
Tamil Meaning: அறுத்து போடு
Synonyms: Reduction, cut, decrease, retrenchment, trimming, salami slicing
Antonyms: increase
Example Sentence: “cutbacks in defence spending”
- Inflation
Meaning: the action of inflating something or the condition of being inflated.
Tamil Meaning: பணவீக்கம்
Synonyms: Boom, Expansion, Hike
Antonyms: Abridgment, Compression, Decrease
Example Sentence: “the inflation of a balloon”
- Undershooting
Meaning: fall short of (a point or target).
Tamil Meaning: சிறியதாக்கப்பட்ட
Synonyms: Blow, Blunder, Botch, Disregard
Antonyms: Accomplish, Achieve, Attend
Example Sentence: “the figure undershot the government’s original estimate”
- Retreat
Meaning: (of an army) withdraw from enemy forces as a result of their superior power or after a defeat.
Tamil Meaning: பின்வாங்கல்
Synonyms: withdraw, retire, draw back, pull back, pull out
Antonyms: advance, dig in
Example Sentence: “the French retreated in disarray”
- Distress
Meaning: extreme anxiety, sorrow, or pain.
Tamil Meaning: துயரத்தில்
Synonyms: Anguish, suffering, pain, agony, ache, affliction
Antonyms: appiness, comfort
Example Sentence: “to his distress he saw that she was trembling”
- bounce back
Meaning: to return quickly to a normal condition after a difficult situation or event
Tamil Meaning: மீண்டெழுவது
Example Sentence: he bounced back easily from her surgery.
- Subdued
Meaning: overcome, quieten, or bring under control (a feeling or person).
Tamil Meaning: அடிபணிய
Synonyms: Conquer, defeat, vanquish, get the better of, overpower
Antonyms: Cheerful, Happy, Aroused
Example Sentence: “she managed to subdue an instinct to applaud”
- Rein
Meaning: the power to direct and control / keep under control; restrain.
Tamil Meaning: கருத்துரிமையளிக்கும்
Synonyms: Restrain, check, curb, constrain, hold back
Antonyms: release
Example Sentence: “with an effort, she reined back her impatience”
- Deficit
Meaning: the amount by which something, especially a sum of money, is too small.
Tamil Meaning: பற்றாக்குறை
Synonyms: shortfall, deficiency, shortage, undersupply
Antonyms: surplus, profit
Example Sentence: “an annual operating deficit”
- Exemptions
Meaning: the action of freeing or state of being free from an obligation or liability imposed on others.
Tamil Meaning: விதிவிலக்குகள்
Synonyms: Immunity, exception, dispensation, indemnity, exclusion
Antonyms: liability
Example Sentence: “vehicles that may qualify for exemption from tax”
- Recapitalization
Meaning: Recapitalization is the process of restructuring a company’s debt and equity mixture, often to make a company’s capital structure more stable.
Example Sentence: Recapitalization may be motivated by a number of reasons. Usually, the large part of equity is replaced with debt or vice versa.
- Ailing
Meaning: in poor health.
Tamil Meaning: நஷ்டத்தில் ஓடும்
Synonyms: Ill, unwell, not well, sick, sickly, poorly, weak, indisposed, in poor/bad health
Antonyms: healthy, strong, successful
Example Sentence: “I went to see my ailing mother”
- Subdued
Meaning: (of a person or their manner) quiet and rather reflective or depressed.
Tamil Meaning: அடக்கமாக
Synonyms: Sombre, low-spirited, downcast, sad, dejected, depressed, low
Antonyms: Lively, cheerful, loud, noisy
Example Sentence: “I felt strangely subdued as I drove home”
- rate cut
Meaning: a decision by a central bank to reduce its main interest rate, usually to influence rates charged by other financial institutions
Example Sentence: Despite all the Fed’s rate-cutting, mortgage rates still rose.
- set the tone
Meaning: to establish a particular mood or character for something
Tamil Meaning: தொனியை அமைக்கவும்
Example Sentence: The governor’s speech set the tone for the whole conference.
- Reforms
Meaning: make changes in (something, especially an institution or practice) in order to improve it.
Tamil Meaning: சீர்திருத்தம்
Synonyms: improve, make better, better, ameliorate, refine, mend, rectify
Antonyms: preserve, maintain
Example Sentence: “the Bill will reform the tax system”
