Cogencis, Monday, Dec 2
By Siddharth Upasani
Home Minister Amit Shah made an impassioned speech in defence of the economy over the weekend.
"Do not lose confidence simply because of temporary growth slowdown. The Indian economy and markets will emerge stronger because of the decisive, bold leadership that India is currently under. This is a crucial time. Industries must commit themselves to growth. Share your problems with our finance and commerce ministers," Shah said at an awards function on Saturday, with the who's who of India Inc in attendance.
Data Released On Friday Showed Growth Slumped To A Six-and-a-half-year Low Of 4.5% In Jul-Sep, Forcing Economists To Make Another Raft Of Downward Revisions To Their Full-year Forecasts; India's Growth This Year Is Now Widely Expected To Be The Lowest Since The Global Financial Crisis-hit Year Of 2008-09.
How Shah has concluded that the current slowdown is temporary is not known, especially when one considers the latest GDP numbers. Data released on Friday showed growth slumped to a six-and-a-half-year low of 4.5% in Jul-Sep, forcing economists to make another raft of downward revisions to their full-year forecasts; India's growth this year is now widely expected to be the lowest since the global financial crisis-hit year of 2008-09.
Shah labelled the last five years as "detoxifying years for the Indian economy" following the failures of the previous 70 years. Another quotable quote was about the effect of reforms ("reforms always have a ripple effect that must be dealt with"). And while the home minister exhorted the industrialists present to not lose confidence, he did not explain why the domestic economy--particularly the average consumer--had been hit so horribly in recent quarters.
Growth in private consumption expenditure, which crashed to an 18-quarter low of 3.1% in Apr-Jun, rose slightly to 5.1% in Jul-Sep, last week's data showed.
Confidence, or the lack thereof, may partially explain the ongoing slowdown, particularly from the production side. But weak consumption spending hints at forces the government is not ready to acknowledge, such as rising unemployment and poor policies.
Apart from defending the economy, Shah had to also defend the Bharatiya Janata Party-led government's tolerance levels.
In a now viral question, billionaire industrialist Rahul Bajaj said corporate India didn't have the confidence that the government would appreciate any criticism of its policies.
While Shah responded as expected ("there is no need to be scared", "if there is a government which has faced the most criticism, it is us", "this atmosphere you speak of, we will have to work to improve it"), Finance Minister Nirmala Sitharaman, also sitting on the dais, didn't mince words on social media later.
Writing on Twitter on Sunday, Sitharaman rebuked Bajaj for spreading his "impressions" about the government, saying his criticism of the Centre "can hurt national interest".
The irony would not have been lost on Bajaj.
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Repo Rate: 5.15%
Reverse Repo Rate: 4.90%
Cash Reserve Ratio: 4.00%
Bank Rate: 5.40%
Marginal Standing Facility Rate: 5.40%
Statutory Liquidity Ratio: 18.50%
Edited by Avishek Dutta