The poor, salaried, businesspersons — all are unhappy. For, the underlying macroeconomics is wrong – the finance minister is trying to solve the aggregate demand problem by supply-side economics.
The annual budget of the Union government was placed in Parliament on the February 1, 2020. In the very beginning of her second budget speech, finance minister Nirmala Sitharaman mentioned that “this is the Budget to boost their (people of India) incomes and enhance their purchasing power. Only through higher growth we can achieve that and have our youth gainfully and meaningfully employed.”
First of all, the evidence from other countries around the world shows that higher growth is neither necessary nor sufficient condition for having the youth of the economy gainfully and meaningfully employed.
Second, the current slowdown is happening because of low income and low purchasing power of people in India at aggregative level. Therefore, growth has to be enhanced by increasing incomes and purchasing power of people by providing them gainful and meaningful employment and wage, rather than enhancing purchasing power by fostering growth.
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