Governments’ macroeconomic policies are usually aimed at maximizing growth and reducing unemployment, but according to a famous Indian economist, the Modi government’s policies led to a massive recession in the Indian economy and four decades of high unemployment.
In a recent research paper, Oxford-educated economist Pulapare Balakrishnan said that macroeconomic policies have been shrinking the economy since 2014, reducing demand in the Indian economy.
Balakrishnan wrote in a paper titled ‘Unmoved by Stability’ published in the Economic and Political Weekly (EPW), “Macroeconomic policies have been weakening the economy since the year 2014. The government has both its arms – one monetary policy and the other fiscal policy. Used to reduce demand in the economy. It also affected investment. ” He said that the Modi government could not gauge the impact of its macroeconomic policies.
He added, “It also includes defaults from the government. The government promised to increase both infrastructure and jobs, which would have been met only by the government increasing expenditure. This would have increased private investment. But systematically It was not attempted. “
Questioning the government’s policies, Balakrishnan wrote, “There are many reasons to believe that the country has been strapped with money since 2014”. Regarding the controversial demonetisation move of the Modi government, Balakrishnan said that private investment did not appear to decline after demonetisation, but “no one can deny that the rate of investment could not have accelerated due to this.” .