The case describes the slowdown of Indian economy. After years of outperforming its emerging market peers, the Indian economy began running out of steam. The view that the Indian economy was staring at a protracted slowdown gained unanimous acceptance by mid-2019. Even the annual report of the RBI for the fiscal year 2018-2019 confirmed that the Indian economy had indeed hit a rough patch. The economy grew at 4.5% for the three months ending September 2019, down from 5% in the previous quarter and down from 7 % for the same period a year earlier, the slowest growth in six years. The collapse of the automobile sector in the financial year 2018-19, the rising number of non-performing assets (NPAs), sluggish consumer demand, and failing manufacturing sector all contributed to the slowdown in the Indian economy. India’s Ministry of Finance and its central bank took several measures including cutting corporate tax, coming out with a bailout package for the cash-strapped housing sector, promising to speed infrastructure spending, rolling back the newly introduced taxes on foreign investors, reviving the automobile sector, slashing angel tax and boosting investments, and bolstering economic growth. On a positive note, contrary to the prevalent grim outlook for the Indian economy, several experts and industrialists were optimistic about India’s economic growth trends. However, economists noted that all policies proposed by the Indian government to address the slowdown seemed to focus on businesses and not on individual earners. Amidst these developments, economists were wondering whether the measures introduced by the government would help in reviving the economy in the absence of strong structural reforms. .

Economics Case Studies | Case Study in Management, Operations, Strategies, Business Environment, Case Studies

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Issues

The case is structured to achieve the following teaching objectives:

	Analyze the trends of various performance indicators for the Indian economy and identify the reasons for the slowdown.
	Analyze the interlinkages between different economic variables and growth.
	Investigate whether the economic slowdown being faced by the Indian economy is cyclical or structural.
	Analyze the measures taken by the government and the RBI to recover from the slowdown.
	Examine the impact of the measures taken by the stakeholders of the Indian economy.
	Create a roadmap to arrest the economic slowdown and bring the Indian economy to the growth trajectory.

Contents

INTRODUCTION

BACKGROUND OF THE INDIAN ECONOMY

SLOWDOWN BLUES OF INDIAN ECONOMY – AN OVERVIEW OF THE CRISIS

IMPACT OF THE MEASURES

FUTURE OUTLOOK

EXHIBITS

Keywords

Indian economy, Economic Slowdown, Economic growth, Cause of economic slowdown, Impact of economic slowdown, Demonetisation, GST, NPAs in Banks, Measures to Revive economy, Rural consumption slowdown, Structural and Cyclical Economic Factors

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