- Vinod Chand
The Government of India has released estimates that India’s GDP has contracted by 7.3% in 2020-21. What does this mean?
To me, as a citizen of India it doesn’t mean much. What matters to me is what is left unsaid between the lines and that’s what I am going to highlight here today. According to the CMIE report, during the second wave of Covid around 1 Crore Indians have been rendered jobless. 97% households have seen a drop in their incomes. https://indianexpress.com/…/second-wave-rendered-1-cr…/
The mere medical expenses has made common people mortgage property, sell their jewelry and take loans to settle the hospital bills. https://indianexpress.com/…/how-high-covid-19-bills…/
And yet …. the Corporates have raked in superlative profits in the last year. In the quarter ending March 2021: 935 listed Corporates booked a profit of a whopping Rs. 1.58 Trillion. This number is expected to go up as nearly 3/4th of the listed companies have yet to declare their profits. While the Corporates grew their top-line (turnover/sales) by 14.7% their net profits expanded by 212.4% !!!You can read the full report here: https://www.cmie.com/kommon/bin/sr.php?kall=warticle…
Do you realize what this means? This means that the input costs have marginally increased but the sales prices have been jacked up way beyond reasonable limits so that profits can be maximized.
There is no “Economies of Scale” model of manufacturing or retail that can otherwise justify a 212.4% profit expansion for a 14.7% sales rise. It means one and only one thing: You are being forced to dip into your savings, during a pandemic, as you are forced to stay indoors, while the Corporates can earn big profits by jacking up the prices of their wares and get fat dividends and bonuses for their owners and top honchos.
So what does the contraction in GDP of 7.3% mean to me? It simply means that the Government is trying to paint a sorry picture of the economy to get sympathy from the common people under the guise of a worldwide pandemic, while trying to hide the facts in plain sight that there is someone else getting richer off you. Disclaimer: There is absolutely nothing wrong in earning profits, all businesses do that. But if these profits are made while holding people at ransom, with the Government making policies to crush the informal sector out of the competition, there is something seriously wrong ….. very very wrong. And this time, YOU ARE AT STAKE.