India's economic growth slipped further to hit an over six-year low of 4.5 per cent in July-September, according to official data released on Friday. Day after the official data was released, on Saturday, the BJP allies have hit back at the saffron party saying that the state of economy alarming.
According to Indian Express, One ally pointed to a “talent deficit” in the government, while another asked the government to hold an urgent meeting of political leaders and economists to find a way out of the crisis. SAD leader Naresh Gujral told The Indian Express, “The state of the economy is alarming, we all are concerned. It is causing alarm because of the joblessness and lack of growth which is leading to unemployment.”
Gujral also went on to say that the BJP had not convened any meeting of allies to discuss serious issues and its allies are quite unhappy, 'with its oldest ally, Shiv Sena, has already walked out and others are waiting at the departure lounge.”
JD(U) leader K C Tyagi also showed his concerns over the falling growth rate. Tyagi told the Indian Express, that “The government should not ignore or ridicule warnings of economists or former RBI governors. It should open modes of communication, there should be a meeting of political leaders and economists. People like (former PM) Manmohan Singh should be called to discuss the issue. Because this is not a matter of confrontation, it is a matter of consultation.”
The Gross Domestic Product (GDP) expansion rate moderated from 5 per cent recorded in April-June 2019 and is much weaker than the 7 per cent growth registered in July-September 2018, according to official data released Friday. The major factor in the GDP fall was manufacturing contracting by 1 per cent. A separate data showed core infrastructure industries' output declining 5.8 per cent in October, the biggest contraction since at least 2005.
The GDP growth rate in the second quarter of the current fiscal year (April to March) is the slowest since January-March 2013 and marks six consecutive quarters of slowing growth -- a first since 2012. This despite the Narendra Modi-led government taking several steps -- including slashing corporate taxes, setting up a special real-estate fund, merging banks and announcing the biggest privatization drive ever -- to revive investment climate and bolster economic growth.
Also, the Reserve Bank of India (RBI) has cut interest rates five times so far in 2019, by a total of 135 basis points, to boost liquidity in the financial system amid concerns that growth momentum is slowing down. There is an expectation that the central bank may slash interest rate again at its monetary policy meeting next week. Some surveys show business confidence is at multi-year lows. For the first half of FY 2019-2020, the GDP growth slowed to 4.8 per cent, against 7.5 per cent recorded in the first half of 2018-19.
(Inputs from Agencies)
