In India, the slowdown in growth and the "climate of fear" make employers doubt<

This is a very serious alert for the Modi government. The Indian central bank (Reserve Bank of India, RBI) announced on Thursday 5 December that it was revising its annual growth forecast for the country to 5% instead of 6.1%. This is well below the 8% needed to absorb new entrants to the labor market, more than a million young people per month. The Indian economy is slowing down. All sectors are marking time, industry, services, agriculture, construction.

The central bank, on the other hand, gave up lowering its key rate, the one at which it lends to commercial banks. This is maintained at 5.15%, its lowest level for nine years. It has lost 1.35 percentage points after five revisions since February. These successive declines have not revived activity, the banks, too indebted, not having passed them on to individuals and businesses. The central bank took notice.

RBI Governor Shaktikanta Das, however, believes that inflation is likely to remain high in 2020. Food prices have soared in recent months, especially that of onions, the staple food of Indians, whose Crops were damaged due to heavy monsoon in the producing areas.

Multifaceted crisis

India is facing a multifaceted crisis: consumption, credit and investment. So far, the day-to-day measures taken by Finance Minister Nirmala Sitharaman, such as easing restrictions on foreign investment, lowering corporate tax by 18 billion euros, l The injection of liquidity (8.7 billion euros) into public banks had no effect on household consumption and business morale.

On the occasion of a conference organized on November 5 by the Indian Express newspaper, in Bombay, the Minister of Finance left the business leaders present perplexed, by not suggesting any solution to the deterioration of the economic situation. As an aside, several of them declared themselves "in a dismal mood" and denounced, in veiled terms, the "total inaction" of the government to restart the machine. Questioned in recent weeks by Le Monde, several Indian SMEs have expressed their deep concerns as well as that of their shareholders in the face of forecasts of a sharp drop in economic activity for several more months.

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