Hey guys. While Owlett was inactive, a couple of big changes occurred in the economy. Modi has finally decided to decrease corporate tax, hoping that this will encourage more foreign private investments. However, this has caused huge growth to the fiscal deficit in the economy. (Fiscal deficit- it occurs when the expenditure of the government crosses the revenue earned by the government. It is calculated yearly.) Due to these cuts, it is now just as easy to do business in India as it is in the rest of Asia.
The government had hoped that this would create more jobs and employment. However, many companies are not hiring as a lot of industries such as Automobile and Real Estate are suffering huge losses and the companies are not sure whether their industry will continue at the same pace. Thousands of workers have been laid off from places such as the automobile industry down to the biscuit industry.
The governmentis hoping that whatever losses it takes this year will eventually lead to economic growth and increase in job production. Due to the rise in the fiscal deficit, India will be forced to borrow, and are now the highest in the past nine years.
More on this tomorrow!