Congress leader Rahul Gandhi
Congress leader Rahul Gandhi
ANI Photo

New Delhi: Congress leader Rahul Gandhi on Wednesday hit out at the Centre over the Reserve Bank of India's latest warning on economic contraction amid the novel coronavirus pandemic and said that "distractions through media will not help the poor".

"RBI has now confirmed what I have been warning for months," the Wayanad MP tweeted this morning along with a news report. The Congress leader also provided few suggestions to the government which includes "Government needs to: Spend more, not lend more. Give money to the poor, not tax cuts to industrialists. Restart economy by consumption." "Distractions through media won't help the poor or make the economic disaster disappear," he added.

Declining capacity utilisation, weakening of consumption demand and overhang of stressed balance sheets are restraining new investments, the Reserve Bank of India (RBI) had said on Tuesday while calling for wide-ranging reforms to regain losses due to COVID-19 crisis and return to the path of sustainable economic growth.

The corporate tax cut of September 2019 has been utilised in debt servicing, a build-up of cash balances and other current assets rather than restarting the capital expenditure cycle, it had said." These underlying developments suggest that the appetite for investment is anaemic and in need of more reforms," had said the central bank in its 2019-20 annual report.

The RBI said that COVID-19 crisis can be converted into an opportunity by using an online provision of education and training to implement reforms in the social infrastructure by skill development and reskilling so as to prepare a labour force equipped to keep pace with a big thrust on infrastructure.

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