Act before its too late
The global rating agency Moody's Investors Service has again slashed India’s 2020 GDP growth forecast. The latest projections by Moody's peg 2020 GDP growth to 5.4% (earlier 6.6%); and 2021 GDP growth to 5.8% (earlier 6.7%). The rating agency has highlighted the disruptions in global trade arising due to spread of coronavirus as one of the reasons for slower growth. In other concerns, lower than potential GST collections is one of the prominent concerns expressed by the agency. If the history is any indicator of the trade trends, we can reasonably conclude that any major shift in the trade from one jurisdiction to the other, even if it is due to temporary disruptions, is not easily reversed after the disrupting condition cease to exist. Shift of automobile and electronics manufacturing from Japan to USA and then from USA to China is one example. India lost some of its textile exports to Bangladesh due to child labor issues. We also lost currency and derivativ...