A ‘serious’ dose of austerity

Time and again, warnings about the dangers of austerity (a state of reduced spending and increased frugality in the financial sector) have grown louder across the world. The very recent being that in the US after President Obama reluctantly signed and ordered an $85 billion austerity drive which can eventually damage the economy and slash jobs.

To address the fiscal problems and spur growth in the country, the Government of India has many a times taken austerity measures in the past, like recently the finance minister has cut the government spending by nine percent this year, and a 10-percent cut is expected for next year in the budget. But in a country like ours, where the issue of unemployment already continues to persist, an austerity regime will further lead to compromising on the quality of life and the living standard of the people.

Austerity measures generally refer to the measures taken by governments to reduce expenditures in an attempt to shrink their growing budget deficits. Therefore, I feel, in India, where anyway the unemployment rate is so immense that lately young people have started to believe that they have no future here, and that their existence is being embittered. The austerity measures are perhaps not good because they tend to lower the quantity and quality of services and benefits provided by the government.

The global policymakers have also dramatically underestimated the significance of government spending during a recession period. This has also resulted in administration expecting unassuming pull from severity which has later seen their economies plunging back into a devastating recession.

Hence, the austerity measures, though required sometimes, must not be considered as the only way out for economic recovery; they are just an option of the last resort.

Also these austerity measures increase the social instability in any society. For instance, if you look at Britain and the rest of Europe, you will get to know how terrible austerity measures have been and that they haven’t, in any way, resolved the economic crisis.