Message to Modi government from cash crunch: Don’t waste the budget, make India feel good again

NEW DELHI: The first month after demonetisation is almost over. To get a sharp picture of how the economy and businesses have been impacted, ET’s reporters and domain specialists took a close look at data, talked to industry insiders and sector experts and put together an easy-to-follow and indepth analysis, from the macro economy to jobs to all key sectors.

The short-term verdict in sector after sector and in the macro economy is not cheery.

Growth, demand, investment, confidence are all down – 8% GDP growth is now impossible in short term. Consumption, a key GDP driver and marker of general well-being, can stay depressed for two quarters. Investment prospects are getting spooked by demand slowdown.

The sunrise ecommerce sector has been hit hard just when the festive season had put it on a different plane. Home-buying, another big indicator for general well-being, is virtually at a standstill. Jobs are still not impacted severely. But if things don’t improve, the job scene can turn bleak as well.

The biggest learning for the government should be this: DON’T WASTE THIS BUDGET. The February 1exercise should inject a massive dose of positive sentiment among consumers, investors, homebuyers, traders. Lower income and corporate tax outgos, experts say, is the surest way to achieve this, along with big public spending, and specific boosts for home-buying and investment.

Tax cut-led confidence building policies plus efficient remonetisation in the new year are critical.

India can get back on track after demonetisation. But only if GoI gets the message on making Indians feel good again.