If the GDP growth rate is 7.2 then why are the sales of companies decreasing?
Rakesh Kayastha 23 Dec, 2024
`I swear on business that I don’t lie’. This dialogue heard in old Hindi films is completely true. No person associated with business lies, at least about the economy. So if you want to know the state of the country’s economy, then listen to the industry and the stock market.
During the Lok Sabha elections, the industry was at the forefront of the kirtan of `Abki Baar Chaar Sau Paar’. But along with this kirtan, a whining voice was also coming, ‘Due to inflation, there is a lot of sluggishness in the markets. Sales are not happening, it would be good if the government pays attention.’
In a similar tone, some people were also asking that if the GDP growth rate is actually 7.2, then why are their company’s sales and profits decreasing. The subdued voice of protest has now turned into a chorus. If you don’t believe it, just turn on any business channel and see.
People associated with the industry and the stock market have started saying openly that at present a joke is going on in the country in the name of economic governance. The reason for this anger is the statistics, which are in front of us like a bare truth.
Asian Paints, the country’s largest paint company and considered a safe investment in the stock market, has recorded a decline of more than ten percent in its sales. This has happened after a long time in the history of the company. The sales of the largest consumer company Hindustan Unilever have been stagnant for two years. The same is the case with big companies like Nestle, Marico and Dabur. Their sales are either stagnant or declining.
You can fool the common man by whitewashing the statistics. But the industry and the stock market have their own methods of checking facts. Many experts are saying that if the GDP growth rate is what the government is saying, then the growth rate of top consumer companies should be at least 10 percent and the growth rate of the banking sector should be 15 percent. If this is not the case then there is something fishy in the government figures.
The government presented the figures of 7.2 percent growth rate in several quarters in such a way that 7.2 percent became a meme material. That is, all the numbers will change but India’s growth rate will remain 7.2 percent only.
After all, the government data for the current quarter has acknowledged for the first time that there is a decline in the GDP growth rate. According to the government, this growth rate is 5.4 percent. But experts are not satisfied with this claim either. They say that this figure has come due to a change in the calculation method.
If we look at the method used during the Manmohan Singh government, the actual figure should be between 1.5 and 3 percent. Economists like Arun Kumar are even saying that GDP growth is in the negative.
There have been allegations of playing tricks on the inflation rate. When the price of onion increased, the Finance Minister had clarified- I do not eat onion. There have been allegations that the government excludes consumer goods whose prices increase from the wholesale price index, so that the data comes out as per its wish.
The kind of capitalist economy India is running on, its main basis is consumption. Consumption will increase only when the common man has money in his hands. Leave aside the government data, just see how much your income and purchasing power has increased in the last two-three years.
Income is going down and purchasing power is decreasing. On the other hand, the government treasury is increasing. The brave government is patting its back on the fact that by imposing taxes in new ways, we have increased our collection. The entire responsibility of filling the government’s pockets lies on the ten crore people who pay income tax. These people are the ATM of the government. Money can be collected from them arbitrarily by holding their neck.
The contribution of income tax in government revenue has surpassed corporate tax. The whole world knows that the relationship between the government and the corporate world is one of mutual transactions, but the common taxpayer is only there to pay. Collecting taxes is a good thing but it is the responsibility of the government to use that money judiciously to generate employment and improve the level of services. But this money is being spent only to win elections.
The game of transferring money directly into accounts in exchange for votes has started and nobody is going to stop it. The MNREGA scheme, which the Prime Minister used to mock by calling it a pit digging programme, had played a big role in changing the rural economy. In Modi’s rule, there is five kg grain and an election envelope of Rs 2100 in every state, which is turning the country’s vast population into a group of idlers.
What will the taxpayer, who is suffering from the all-round blow of maximum income tax and GST, do? The stubbornness of ripping open the stomach of the hen and taking out all the eggs at once will definitely give birth to a new parallel economy in the entire country and this will not be good for India’s future.
