Panaji: Congress party on Friday claimed that the Indian economy is headed for a serious stagnation which is indicated in the fact that Reserve Bank of India (RBI) itself has lowered India’s GDP growth forecast for current fiscal to 6.1 per cent.
Addressing a press conference in Panaji, Congress’ National Spokesman Sanjay Jha said that the Indian economy is headed for a serious stagnation unless a complacent government that is in a deep sleep like Rip Van Winkle wakes up.
He said that RBI itself has lowered India’s GDP growth forecast for FY 2019-20 to 6.1 percent which will be the lowest in last six years.
Jha said that while there are several reasons for the virtual recession in India like rising rural distress, record levels of joblessness, falling consumer demand and comatose private capital investment, flat exports, the unresolved twin balance sheet problems of bank NPA’s and large wilful defaulters, the collapse of the NBFC sector triggered by ILFS , there are four distinct red flags that should worry us all Indians.
“To say that the Indian economy is gasping for breath on a ventilator will not be an exaggeration,” he added.
The Congress leader said that central government’s data integrity has itself become questionable. “We are being compared to China’s dodgy data, pregnant with brazen manipulation. For example, the CAG reported that India’s real fiscal deficit could be as astonishingly high as 5.8 per cent, while the government claimed it was 3.46 per cent,” he pointed out.
He said that the union government seems to have completely ignored the vital role of agriculture, where 50 per cent of our people are employed.
“The doubling of farm income by 2022 is a complete sham . The agricultural sector grew by a measly two percent over the period of 2014-19 despite excellent monsoons in the last three years, and was almost half of UPA’s 3.85 per cent,” he said .
“The BJP reneged on its promise of giving Minimum Support Price by telling the Supreme Court of India that it would distort market rates. Understandably, farmer protests rose from 628 in 2014 to 4837 in 2017. The real wages of agriculture labour barely rose by one percent in the last few years compared to almost 10-15 per cent in the past decade” added Jha.
He further said that union government seems to have misread the problem confronting the economy which is actually a demand contraction created by the voodoo economics decision of demonetisation and the ham-handed execution of the GST.
“Instead, they are fixing the supply-side; it is like giving someone a foot massage who is suffering from a migraine headache. By appropriating Rs 1.76 lakh crore from the RBI and giving it as a tax bonanza to the corporate sector the government missed an opportunity to boost public expenditure and increase MNREGA outlay and help the MSME sector that would have augmented demand,” Jha said.
“Instead, most likely industry will absorb the higher earnings as retained profits given the fact that capacity utilization is at a mere 75 per cent. That is why despite the RBI dropping repo rates has had negligible impact on fresh investments which are at a 16 year low. India’s GST collections are at a 19 month low signalling slumping consumer purchasing power, ” he added.
