New Delhi : The Congress party expressed grave concern over the low GDP growth rate that has fallen to a record low of 5.4 percent, lowest in last 21 months.
Addressing media persons in New Delhi, party spokesperson and the Chairperson Social Media and Digital Platforms, Supriya Shrinate highlighted alarming economic realities under the Modi Government. She remarked, “Modi government is presiding over India’s economic ruin”.
She said, Indian economy was witnessing a toxic concoction of low growth and low wages.
“A slowdown in GDP can’t be dismissed just because the numbers are uncomfortable for the BJP. India’s Q2 GDP growth for the current financial year has plummeted to its lowest level in 21 months. And this raises a lot of concern”, she observed, while pointing out, “it means: economic activity is sluggish, investments are not being made, consumption has been dampened, exports have crashed, jobs are not being created”.
The Congress leader noted that 5.4% GDP growth has come in as a rude shock. “It should send alarm bells ringing among policy makers but instead there is complete denial even dismissal of the harsh reality”, she observed, while adding, “however what comes as a bigger disappointment is that policymakers are completely clueless”.
She pointed out, the RBI in its last monetary policy, which was as late as October 6, had estimated a GDP growth for Q2 at 7%. The government meanwhile had projected the same at 6.5%, she added. “With all the high frequency and macro economic indicators at their disposal – how do they read the tea leaves so wrong?” she asked.
Referring to ‘Private Consumption’, she said, “the engine of growth which accounts for nearly 60% of GDP has slowed down quite significantly, indicating a slump in demand both in urban and rural India. In Quarter 2 private consumption growth dropped to merely 5.9%. A dip in consumption means people are spending less which in turn means corporates will manufacture less, so lower investments and fewer jobs are inevitable”.
Referring to manufacturing sector, Supriya Shrinate said, it has crashed. “A complete crash in manufacturing growth, which grew by merely 2.2% is an indicator of low production and exposes the hollow claims of make in India and the PLI scheme”, she remarked.
She said, both imports and exports had also dampened.
“Manufacturing being stuck at 2.2% reflects in external trade data. Import growth for the second quarter has actually shrunk by nearly 3% and exports have plummeted by 2.8%”, she pointed out.
She said, there was no excuse for a slowdown in investments. “Government expenditure in Q1 was Rs 4.15 lakh crore, and the government very conveniently blamed the suppression on the model code of conduct during the Lok Sabha elections. But what explains a lower absolute expenditure Q2 at just Rs 4.01 lakh crore?” she asked.
The almost immediate impact of low investments is on jobs, she added, while referring to alarming unemployment rate in the country, especially given the fact that 65% of our population is below the age of 35.
Referring to high rate of inflation, Ms Shrinate said, amidst high unemployment and stagnant wages, back-breaking prices have dealt a body blow to family budgets of the middle class and the poor Indians. “Inflation has been consistently close to the 6% mark with vegetable prices rising by nearly 42.18%, the highest in 5 years”, she said.
She noted that due to high unemployment and back breaking high prices people are forced to draw into their savings. “Over the last 5 years savings have dipped by as much as 44%. In 2019-20: 11.61 lakh crore were parked in savings today it has nearly halved to 6.52 lakh crore”, she said.
Referring to gold loans, she said, if drawing from savings wasn’t hard enough, the increase of nearly 50.4% in gold loan demand during the first 7 months of this financial year is yet another sign of financial distress.
Recalling how Prime Minister Modi while being the Chief Minister in 2014 would say that the value of rupee was falling in proportion to the fall in the dignity of the Prime Minister, she pointed out, now the Rupee was dangerously close to the 85/$ mark, while in 2014 it was 58/$.
Ms Shrinate maintained that the only “saving grace” has been agriculture, which has grown at 3% and anchored the economy. “The same agriculture whose farmers Mr Modi won’t allow to enter Delhi and those who survive on a measly 27 rupees per day”, she remarked.
“When will the propaganda end, and when will Modi government address the real economic challenges facing the nation? When will it get over its obsession of the world’s fastest growing economy and look at real per capita income, rising levels of economic inequality, low growth, low wages, no jobs and high prices?” she asked, adding, “but does Modi care; he cares about safety and prosperity of one person Gautam Adani”.
