There is a fundamental problem with this approach. It ignores the fact that the slowdown is taking place because of faltering demand, which is arising because there is no buying power in the hands of the people. Over 8% of the working age population is unemployed, industrial wages are less than half of what is the accepted norm for a minimum wage, agricultural wages are declining in inflation adjusted terms (they have increased by about 4% in two years!). In such a situation, producing more will be useless because there are no buyers.
The most extreme example of this is that India is currently holding record stocks of foodgrains (713 lakh tonnes in August) yet there are nearly 20 crore undernourished (hungry) people in the country! This macabre anomaly exists because there are no buyers for food grain in the open market – and the government refuses to sell the grain at subsidised prices in addition to what is the “normal” offtake.
https://www.newsclick.in/Corporate-Tax-Concession-Modi-Government-Joblessness-Economic-Slowdown
![Prof K Nageshwar: What About Personal Tax Exemption? || [HD] (Video)](https://secure.gravatar.com/avatar/a529f8b3731b5abf1f9994aa34434368?s=100&d=mm&r=g "Prof K Nageshwar: What About Personal Tax Exemption? || [HD] (Video)"){kind=avatar}
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![Prof K Nageshwar: What About Personal Tax Exemption? || [HD] (Video)](https://i0.wp.com/www.socialnews.xyz/wp-content/uploads/2019/09/23/maxresdefault-182.jpg?w=180&quality=80&zoom=1&ssl=1 "Prof K Nageshwar: What About Personal Tax Exemption? || [HD] (Video)")
There is a fundamental problem with this approach. It ignores the fact that the slowdown is taking place because of faltering demand, which is arising because there is no buying power in the hands of the people. Over 8% of the working age population is unemployed, industrial wages are less than half of what is the accepted norm for a minimum wage, agricultural wages are declining in inflation adjusted terms (they have increased by about 4% in two years!). In such a situation, producing more will be useless because there are no buyers. The most extreme example of this is that India is currently holding record stocks of foodgrains (713 lakh tonnes in August) yet there are nearly 20 crore undernourished (hungry) people in the country! This macabre anomaly exists because there are no buyers for food grain in the open market – and the government refuses to sell the grain at subsidised prices in addition to what is the “normal” offtake. https://www.newsclick.in/Corporate-Tax-Concession-Modi-Government-Joblessness-Economic-Slowdown