India was still the world’s fastest-growing economy until the end of last year. Since then, the country has surrendered the title back to China. Now, the country economy slump appears to get worse. India beat economic slowdown by doing several things.
India gross domestic product (GDP) fell to a five-year low. It stays at 5.8% in the first quarter of 2019. Besides, experts predict there will be another drop in the second quarter.
Moreover, the country car industry has also cut hundreds of thousand jobs. Other than that, goods companies, like Unilever, are also slashing their prices due to the country slowing demand.
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India efforts
The government has tried some efforts to boost the country economy. Last week India introduced several new rules. That includes tax breaks for startups, cheaper home, and car loans, and injection of 700 billion rupees ($9.8 billion) into state-run banks.
A few days after that, India also announced that rules on foreign investment would be eased. Besides, the government also mention said that the country would relax local sourcing regulations that have blocked companies like Apple (AAPL) and other global retailers from opening stores.
However, many experts think that those short term solutions may not be enough to beat India’s economic slowdown. They, instead mention that India’s most urgent needs currently is to reform its labor market.
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However, India has not introduced changes in labor rules. Meanwhile, currently, the country also suffers from the highest unemployment rate in decades.
Moreover, the government this week also got a bit more firepower from India’s central bank to fight its economic battle. The Reserve Bank of India, which has cut interest rates four times this year, announced Monday that it would transfer excess reserves of 1.76 trillion rupees ($24.5 billion) to the government.
