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Akshita Mathur
Oct 09, 2019
In Economics
As of late, there is much talk about an economic slowdown in India, a term often confused with a recession. This conversation is a product of India’s new rate of economic growth which fell from an expected 6.9% by the RBI in FY2019-20 to 6.1%. These rates compare unfavourably with the rapid increase in FY2015-16 of 7.5% to 8.2% in FY17-18 in the initial years of new political dispensation. New Government of India post 204-15 started multiple structural reforms like bringing in Insolvency & Bankruptcy Code (IBC), GST, the Real Estate Regulation & Development Act (RERA) and Demonetization. These reforms were put in place to formalise the informal sector of the economy.
When it comes to the GST, many producers are convinced that the tax reform is cheating them of profits and is also the primary culprit for the Indian economic slowdown. While this is true in part, it should also be noted that similar slowdowns have been seen in every nation that has implemented the GST system. This phenomenon is a result of consumers and industries taking time to adjust to the new tax regime.
Furthermore, the automotive industry, which employs over 35 million people directly, is also facing a slowdown. This industry is responsible for 25% of Indian manufacturing. The automotive industry has seen a 40% fall in sales as of July 2019. This decrease is a result of the spending habits of young India as well as new regulations placed in the industry. Millennials are opting out of purchasing cars because of easy-to-use taxi services, i.e. UBER and OLA and the overall increased ease of transport that has been brought about as a result. This development has pressurised the industry as it discourages demand.
Moreover, due to new regulations passed, which dictate that trucks are now allowed to carry a 20-25% higher payload, resulting in fewer commercial vehicles demanded. While this would work to increase supply and reduce production costs in related industries by lowering barriers to transportation, it would decrease the demand for large commercial vehicles. This act has further put pressure on the auto industry.
Additionally, the government passed a regulation that all vehicles would have to meet Bharat Stage emission standards (BS6 standards) by March 2020. This regulation would work to monitor CO2 emissions by commercial and privately owned vehicles. Due to this, consumers are delaying the purchase of automobiles until the necessary technology becomes available in the market. This delay has resulted in a loss of demand which has added to the national economic slowdown. Jobs are being lost, which further leads to a decrease in consumption and overall economic activity within the country.
The IBC has led banks to declare their non-performing assets – loans that are in default – resulting in a hampering of their ability to lend. This regulation has resulted in decreased borrowing of startup capital for manufacturing as well as personal loans for purchasing commodities, thereby reducing economic activity.
Another factor that has worked towards creating an economic slowdown in India is a ‘synchronised slowdown’ in international economies. This slowdown is a result of various trade conflicts in the world, which could lead to a loss of $700 billion in global GDP output by 2020, according to the IMF. In India, this would mean a loss of export revenue and a decrease in capital imports for manufacturing.
With these happenings in mind, the government is working to reduce the impacts of an economic slowdown and push for economic growth in the country in the following ways;
The government has cut down direct tax rates for Indian companies to 25% inclusive of Cess across the board and 17% for new companies starting manufacturing in the country until 2023. The 17% rate is comparable to peer group countries in the ASEAN region & China, and the government expects that this should help increase FDI in India. An increase in FDI in the country would work to increase production, employment and demand in the nation, which would all culminate to an overall increase in economic activity.
Furthermore, measures have been taken to improve liquidity in the market, which would help make finance available to consumers and producers. These actions would generate demand in the economy and is a measure which comes after an 88% fall in the fund flow from banks and non-bank into the commercial sector. Additionally Reserve Bank of India is aggressively cutting the interest rate to reduce the cost of borrowing, thereby creating demand. To generate more demand in the economy, the government is considering reducing income tax rates, ensuring that consumers have a higher purchasing power and thereby greater demand.
The solutions proposed by the government all work to reduce the impact of the economic slowdown in the medium to long run with little focus on the short run. This way of thinking could harm the population, which is facing an increasing rate of unemployment and cannot necessarily wait for the long term. Keeping in mind India's large youth population, the government should ideally be focused on job creation to reverse the effects of the economic slowdown.
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Akshita Mathur
Sep 08, 2019
In Cultures
Social media often portrays an unattainable life for teenagers, no matter their circumstances, while the television shows that are targeted at this age group are behaviour detached from mainstream entertainment. From the fantastical plots to the unrealistic amount of time the characters spend in their high school years, these stories bring about an idea that these young characters are in ‘perfect’. This stance is even more damaging when it comes to dealing with issues of relationships and mental health, with shows like ‘13 Reasons Why’ and ‘Insatiable’ using revenge as a key plot device in dealing with mental disorders and websites like Tumbler and Youtube portraying the issue as lacking seriousness. What initially started as a bid to remove the stigma around mental illnesses, later transcribed into a way for media to profit off the visual imagery presented by these problems. Anorexia became a way to reach thinspiration goals; depression afforded a sense of mystery to characters; anxiety translated to a cute quirk. Whether its young girls skipping meals for that ideal body type or students who stay up late working on an assignment calling themselves insomniacs, this attempt to join an exclusive club is doing a great deal of harm. In fact, in April 2017 suicide rates amongst adolescents hiked by 30%, this coincidently was the same month ‘13 Reasons Why’ premiered (The New York Times). While this was a correlational study, these results can offer a certain indication to the impact of this show as the trend was limited to 10-17-year-old children, which was the target age group for the show. With this we can further conclude that there is some correlation of negative portrayal of mental illnesses in media with actual life-threatening consequences. Similarly, Netflix’s ‘Insatiable’, which premiered August 2018, promotes the idea that the lead character ‘Patty’ was right to be ashamed of herself and was worth nothing until she magically became skinny. Her transformation was credited to her jaw being wired shut in the aftermath of an injury, and she is unable to eat anything all summer. The plot not only encourages body shaming but also informs viewers that the best way to lose weight is by not eating, a dangerous idea which can lead to disorders like anorexia. The outrage about this show was evident with 228,000 people signing a petition to stop the show’s release based on only its trailer. This fact, of course, did little more than providing the show with a little free publicity which would lead to a wider spread of their detrimental message. In 2012, Tumbler, a popular blog platform banned all content related to self-harm and eating disorders. This action was taken after the website was accused of facilitating a platform where such behaviour can be seen as ‘normal [or] even healthy’ (The Washington Post). The idea was that individuals prone to such behaviour would use the affirmations provided to them by fellow bloggers to excuse their behaviour and even be triggered to continue it. Shannon Barnett, a child psychiatrist at Johns Hopkins Children’s centre has informed that she does not allow patients to mention their scars in group therapy sessions for fear that they may trigger other patients, yet Tumbler facilitated the same actions, with multiple blogs lined with images and quotes dedicated to mental illnesses. They showed mental illnesses as being beautiful and even going so far as suggesting that the act of suicide is a reasonable escape from one’s problems. While this ban was implemented in 2012, many bloggers were able to continue this dangerous trend by using vocabulary that the website providers did not know to sensor for. Furthermore, all this noise about mental illnesses has given rise to a YouTube trend of bloggers sharing stories of their battles with major psychological disorders, i.e. anxiety, depression etc. While there is no way for the public to decipher whether or not these individuals are authentic, it is relatively simple to assess when mental illnesses are used as a shield for unacceptable behaviour. For example, Logan Paul publishing a video of a suicide victim post mortem and stating that it was for the sake of raising awareness when instead it was for shock value. Actions like these remove credibility from actual well-meaning activists who want to bring about awareness of the topic at hand. Actions that have been taken by Paul and other Youtubers work to undo all that has been done to destigmatise mental health problems. Additionally, YouTubers have been profiting from their subscribers’ mental disorders, as often those who confess about having these problems sponsor online counselling services, aimed at helping troubled subscribers get the help they need. These advertisements have resulted in a great deal of backlash as one of the sites repeatedly sponsored, Better Help has been identified as being exploitative and overcharging patients without giving them the details of their subscription plan. They have further claimed to take no responsibility for the quality of therapy provided, often resulting in the patients being matched with unresponsive counsellors. Looking at the current direction in which media is moving, with psychological illnesses being the new trend or exclusive club that people need to join, it is no wonder that there has been a global rise in suicide rates. There are simply no regulations placed on the type of content that is available to young impressionable minds, and it is thus very important to ensure that one is informed about the misinformation that is spread with regards to psychological wellbeing.
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