As the Indian government- centre and states- unlocks the country from Coronavirus induced lockdown, quite naturally, the economic activity has started once again. This has led to a sharp recovery in various sectors, and the high-frequency economic indicators are moving to the greener side, once again. From fuel consumption to electricity consumption, automobile sales to exports, everything is moving to pre-COVID figures or even better than that.
This is contrary to what many ‘experts’ predicted at the time of lockdown when the government released the data for the second-quarter GDP growth. The negative growth of 23 per cent in the second quarter, which was primarily due to halt in the economic activity, gave the doomsday wishers a chance to predict permanent damage in the Indian economy.
Unfortunately, the business of ‘economic experts’, especially those active in media, is more to choose a political side rather than going by data. Until and unless your predictions are sensational, no political side is going to pick it, and therefore, painting a scary picture of anything becomes a compulsion for them.
Hence, the experts made astronomical claims about the Indian economy and how Coronavirus induced lockdown is going to permanently damage it. The contrary view, presented by many including TFIPOST, was that negative growth in GDP is due to the closure of economic activity and once the lockdown is lifted, the economy will pick up once again. However, no one in the media establishment was ready to accept the contrary view/non-expert view.
The problem with the experts is that all their predictions come from the data uploaded by 12 lakh registered companies of the country. More than six crore MSME units and the agricultural sector, which constitutes a significant part of the Indian economy- around half of GDP and 80 per cent of employment- is out of their purview. As per the data on Agriculture, the agricultural exports jumped by 43 per cent, from 37,000 crore rupees to 53,000 crore rupees in April to September period.
The sectors in which India is dominant like Information Technology, Pharmaceutical, and Agriculture, actually performed better during the Corona period and, therefore, the country became a net exporter in the last six months. The negative growth in GDP was primarily due to suppressed domestic consumption of non-essential goods. Once the lockdown was lifted, the six crores MSMEs-which are the second-largest employer after agriculture-were back in business and, this reflected in a sudden jump in demand.
The Indian ‘experts’ failed abruptly to take the MSME sector in consideration while making any economic prediction because very little data is available on these sole ownership firms which mostly employ small numbers- 10 to 20- of people. However, the fact remains that these firms account for around 30 per cent of the Indian economy and employ crores of people. After the lockdown lifted, MSMEs and street vendors came back in business, and total demand moved upwards at an exponential rate.
The ‘experts’, blinded with political bias, and armed with lack of data made hyperbolic claims like the Indian economy would not recover from this slump till 2023 (MSME sector lacks data and this data deficiency could be used to argue for or against macroeconomic health of the country). But now, as all the high-frequency indicators suggest a recovery, the experts are out to look for the next agenda. Many of these people have changed their expertise overnight from economy to crime, and are giving their two cents on the Hathras case.