Hindi English Translation || Editorial || Missing the target: On the economy, the Centre’s growth target

Missing the target: On the economy, the Centre’s growth target

Despite missing the growth target, the economy remains strong

India’s industrial production growth slowed to a six-month low in February to 2.9%, down from January’s 5.2% (revised estimates) and almost halved from last February’s 5.6%. This decline was broad-based, except for a marginal (सीमांत, मामूली) rise in power production of 3.6%, up from January’s 3.4%, but less than half of last February’s 7.6%. While mining witnessed the steepest decline to 1.6% this February, from 8.1% last year, manufacturing almost halved to 2.9%, from 4.9% last year. From a use-based classification, the steep (Rising or falling sharply; also can mean excessive) decline in consumer durables (टिकाऊ, मजबूत) output to 3.8%, from 12.6% last February as well as a production contraction (संकुचन) for the third month in a row, of consumer non-durables by 2.1% (there was a 3.2% contraction in January), indicates a marked decline in overall consumption demand. This has been despite a sharp dip in retail (खुदरा बिक्री) inflation, which was down to 3.61% this February from 5.09% a year ago, with a low food inflation rate at 3.75%, the lowest in two years. This makes it almost certain that the government’s wish for a Maha Kumbh-led spike in consumption has not materialised (To become real or actual), leading to the likelihood of the Centre’s 6.5% GDP growth target for the 2025 fiscal being missed. February’s Index of Industrial Production (IIP) numbers co-relate with the 14-month low in the manufacturing Purchasing Manager’s Index survey conducted by S&P at 56.3.

This highlights two things: the trepidation (घबराहट, आशंका) of manufacturers facing unprecedented global economic uncertainty following U.S. President Donald Trump’s actions and the lack of an appetite (इच्छा, लालसा) among consumers, many of whom have witnessed the value of their assets plummet (तेज़ी से गिरना) due to Indian stock market volatility that has mirrored the peaks and troughs in global exchanges. There have been green shoots, however. Within the manufacturing sector, which has the highest weightage of about 77% in the IIP, 14 of 23 industry groups recorded growth this February from a year ago. Growth was led by motor vehicles, trailers and semi-trailers (8.9%), non-metallic mineral products (8%) and basic metals (5.8%). Capital goods output accelerated to 8.2% from 1.7% last year, indicating robust investment demand aided by a massive rise in government spending. This was despite the liquidity squeeze in India’s banking system by ₹1.7 trillion, as on February 20, due to the massive flight of foreign capital in search of haven asset classes and to hedge (बचाव, जोखिम से बचाव का उपाय) against a depreciating rupee. The central bank stepped in by injecting about ₹2.18 trillion into the banking system using rupee/dollar swap arrangements that ended on March 24. The Centre can perhaps take solace (सांत्वना, तसल्ली) in the fact that despite a possibility of its growth target for the last fiscal (राजकोषीय) being missed, India remains the fastest growing economy.

Courtesy: The Hindu

Important Word List With Meaning

1.Marginal (Adjective)

Hindi Meaning - सीमांत, मामूली
English Meaning - Minor or not very important.

2.Durable (Adjective)

Hindi Meaning - टिकाऊ, मजबूत
English Meaning - Able to withstand wear or pressure; long-lasting.

3.Contraction (Noun)

Hindi Meaning - संकुचन
English Meaning - The process of becoming smaller.

4.Retail (Noun)

Hindi Meaning - खुदरा बिक्री
English Meaning - The sale of goods to the public in small quantities.

5.Trepidation (Noun)

Hindi Meaning - घबराहट, आशंका
English Meaning - A feeling of fear or anxiety about something that may happen.

6.Appetite (Noun)

Hindi Meaning - इच्छा, लालसा
English Meaning - A natural desire to eat or a strong desire for something.

7.Plummet (Verb)

Hindi Meaning - तेज़ी से गिरना
English Meaning - To fall or drop straight down at high speed.

8.Hedge (Noun)

Hindi Meaning - बचाव, जोखिम से बचाव का उपाय
English Meaning - A way of protecting oneself against financial loss or risk.

9.Solace (Noun)

Hindi Meaning - सांत्वना, तसल्ली
English Meaning - Comfort or consolation in a time of distress.

10.Fiscal (Adjective)

Hindi Meaning - राजकोषीय
English Meaning - Relating to government revenue, especially taxes.

11.Steep (Adjective)

English Meaning - Rising or falling sharply; also can mean excessive.

12.Materialize (Verb)

English Meaning - To become real or actual.