There has been a quarter of slowdown and subsequent quarter will also suffer slowdown but the target of making Indian a $ 5 trillion economy strongly stands.
Factors like high-interest rates, current scenario of NBFCs, tightening credit conditions and slowing external demands have collectively introduced a slowdown in the Indian economy, Sanjeev Sanyal, Principal Economic Advisor said in an interview with ET Now. “We agree there has been a slowdown and the finance ministry has been pointing out the weakening demand conditions in its earlier reports,” he added. In the last quarter of the previous financial year, most high-frequency indicators also suggest some moderation in the growth, he further added. Further, in the interview, he mentioned that there has been a quarter of slowdown and subsequent quarter will also suffer slowdown but the target of making Indian a $ 5 trillion economy strongly stands.
He appreciated the Finance Minister Nirmala Sitharaman for coming out with a comprehensive set of policies to boost growth and to revive the economy. He assured that they will take all possible steps in this direction. He also attributed the weakening domestic demand to external factors like the global market slowdown and converting yield curve and he underlined that the domestic factors are also responsible for the slowing down. He said that the lending rates are very high in India and there is a certainly a scope to further bring down the rates.
Indian market is going through a slowdown with major sectors like auto and FMCG are seeing a lack of demand. Increasing stress on the companies has also adversely affected the urban unemployment, which has shot high. This slowdown is also seen in relation to the possibility of an economic crisis.
However, on the possibility of economic crisis, Sanjeev Sanyal replied, “I will be careful, the slowdown does not mean economic crisis. There is a global slowdown but we can not see this as an economic crisis yet.”
Talking on the latest RBI’s decision of transferring Rs 1.76 lakh crore to the government, Sanjeev Sanyal said that the government is not rading the RBI and the central bank is heavily capitalised with currency reserves. He also said that the government has the new recommendations of the Bimal Jalan committee, which they will follow. Before Sanjeev Sanyal, FM Nirmala Sitharaman said in a press conference yesterday that it is very disappointing that there have been questions arising on the credibility of the central bank.