"Whatever happens, it will be different from what you think will happen. Your happiness in 2020 will depend less on what happens than on how you deal with what happens" - Buddhist Monk Ajahn Jayasaro's new year note is meant for humanity but it would be as much at home with India's economy.
Economy 2020 will bring uncertainties and surprises galore. Exports uptick will depend on whether - if at all - the US-China tariff war stabilises and whether the world economy will head towards recession as many economists predict; domestic private corporate investment into new capacities will depend on consumption and demand uptick in the economy; and demand, in turn, will depend not just on whether new jobs are created by fresh private investment but also on regaining consumer confidence. In short, we're in a vicious cycle of a deep, deep slowdown.
Our fate will depend on how we deal with the crises coming our way, how we minimise the collateral damage to businesses, jobs, banks, even lives. So, how should India tackle a wobbly economy? We approached two experts - one outside the government, and one inside. Who better than former finance minister P. Chidambaram, who has himself presided over eight Union Budgets. And, who better for an insider than Bibek Debroy, Chairman of the Prime Minister's Economic Advisory Council.
That's not all. BT's power-packed pre-Budget panel discussion of experts from business, economics, politics and taxation debates how Budget 2020 should tackle slowdown.
Our quarterly Business Confidence Survey covering 500 of India's top CEOs and CFOs clearly indicates industry is shaken as it is convinced GDP growth will decelerate further. Expectations are so low that far from fancying miracles from Budget 2020, entrepreneurs would be happier if it didn't harm them. In the October-December quarter, BCI - on a scale of 100 - dropped to 48.6 as against 49.1 in the previous quarter. Most respondents expect the economy to worsen in January-March quarter with a negative outlook on economic situation, business, financial situation, production, order book, cost of raw material, inventory of raw material and finished goods, investment in business, sales, exports and hiring.
Meanwhile, just when it seemed Indian banking's non-performing assets crisis was abating, new fault lines are emerging. In the past, regulators and finance ministers deferred tackling the ticklish problem for decades, until it became too big to ignore. When they did, Rs 10 lakh crore went down the drain, most banks were left weak and incapable and the engine of economic activity that they fund ground to a halt. New stress points in the banking sector comprising of agriculture exposure, Mudra loans and unsecured loans, among others, add up to nearly Rs 30 lakh crore - about one-third of all outstanding loans. There's need to take the bull by the horns all over again. It's a political hot potato. Do we have the courage to grab this opportunity?
In the words of Ajahn Jayasaro: "In 2020, you will breathe about 7.23 million breaths, of which you will be conscious of about five million. Each breath will be an opportunity?The more you take advantage of this opportunity the better it will be for you and for all those who share your life."