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Congress questions government on slowdown

GDP cannot grow at 5% with an 88% drop in funds flow to the commercial sector
Congress spokesperson Supriya Shrinate said at the news conference.

Our Special Correspondent   |   New Delhi   |   Published 07.10.19, 08:23 PM

The Congress on Monday said the GDP cannot grow at 5 per cent with an 88 per cent drop in funds flow to the commercial sector and lamented that the government was still in denial despite explicit indications of an acute slowdown.

Congress spokesperson Supriya Shrinate said at a news conference: “Why is the government overestimating growth? Experts from all over the world are saying India is faced with a slowdown. Growth of 5 per cent is not possible without credit offtake. Credit is oxygen for economic activity.”

Referring to the latest RBI data that suggested that financial flows to the commercial sector declined by around 88 per cent during the first six months of the current financial year, the Congress spokesperson said: “The flow of funds to the commercial sector is Rs 90,995 crore in 2019-20 so far as against Rs 7,36,087 crore in the same period last year. This convinced us that the slowdown is acute.”

Shrinate argued: “The trust in the Indian economy has collapsed. The RBI survey shows consumer confidence has plummeted to a six-year low. The fault-lines are very deep and the government does not have any comprehensive approach. It is relying on a quick-fix approach. The main problem is that they don’t accept there is an acute crisis. They are bewildered, like Alice in the wonderland.”

She continued: “The famous investor Nilesh Shah has tweeted: ‘It is amazing that we are still growing at 5 per cent with this kind of drop in credit. Credit is like oxygen. No business can survive without it.’ We in the Congress are not rejoicing over this data but it is important to understand the meaning of an 88 per cent slump in credit-offtake. Unlike the government, we take data seriously. These figures show the mood of the country.”

The spokesperson said: “Of the four pillars of growth, three – exports, private investment and consumption — were already down. Now even public expenditure is shrinking; banks are reluctant to give fresh loans. And the credit offtake is low at a time when the RBI has reduced the repo rate by 1.35 basis points. The industry does not have the confidence; people are in fear of job loss. The consumer confidence survey shows more than 52 per cent people are not optimistic about job creation.”

Congress general secretary Priyanka Gandhi Vadra also tweeted about multinational auto major Bosch declaring that it will suspend production at its manufacturing plants for up to 10 days a month during the third quarter (October-December) to adjust production to demand. She said the BJP government had locked down its development agenda and was only trying to mislead people.

Bosch had said in a statement: “In order to align production with sales requirements, the company at its various plants belonging to power-train solutions division would continue to observe no-production days ranging up to 10 days per month per plant during the third quarter of the 2019-20 fiscal.”

Shrinate said that similar shutdowns by Maruti-Suzuki, Ashok Leyland and other firms established the crisis in the auto sector.

Congress spokesperson Randeep Surjewala raised the issue of the proposed strategic sale in BPCL (Bharat Petroleum Corp Ltd). He tweeted: “Prime Minister Narendra Modi used to claim desh nahin bikne dunga (Won’t allow sale of the country…) He has been hell bent on selling everything. He created nothing in six years, only sold and that too amorally.”

The government had quietly repealed the legislation that had nationalised the BPCL, doing away with the need to seek Parliament’s nod before selling it to private and foreign firms.

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