The economy faces a serious stagnation; Government data is doubtful: Congress
PANAJI: The economy is heading towards a serious stagnation that is reflected in the reduction of the GDP growth forecast of the RBI for the current prosecutor, he said on Friday, while questioning the integrity of government data.
Talking to the media here, congressional spokesperson Sanjay Jha He said the government is sound asleep as Rip Van Winkle, the famous fairytale character.
The Reserve Bank itself has reduced India's GDP growth forecast for 2019-20 to 6.1 percent, which will be the lowest in the last six years, he said.
He said the country is heading for serious stagnation, he said.
The data integrity of the Union government led by BJP had become questionable, Jha said.
We are being compared to unreliable data from China, pregnant with shameless manipulation. For example, CAG reported that the real fiscal deficit could be as surprisingly high as 5.8 percent, while the government claimed it was 3.46 percent, he said.
The Union government seemed to have completely ignored the vital role of agriculture, where 50 percent of people are employed in the economy, Jha said.
The (promise of) doubling agricultural income by 2022 is a complete farce. The agricultural sector grew a measly two percent during 2014-19 despite the excellent monsoons in the last three years, and was almost half of the 3.85 percent (growth) of UPA, he said.
The BJP breached its promise to give the Minimum Support Price by telling the Supreme Court that it would distort market rates. Understandably, farmers' protests went from 628 in 2014 to 4,837 in 2017.
Real wages for agricultural labor have only increased one percent in recent years compared to almost 10-15 percent in the last decade, Jha said.
The government misunderstood the problem facing the economy, which is a contraction in demand created by the Voodoo economic decision of demonetization and forced execution of the GST, he said.
Instead, they are fixing the supply side, it's like giving a foot massage to someone suffering from migraine, said the leader of Congress.
By appropriating Rs 1.76 lakh crore from the RBI and granting it as a fiscal bonanza to the corporate sector, the government lost the opportunity to increase public spending and increase MNREGA spending and help the MSME sector that would have increased demand, Jha said.
Instead, the industry is most likely to absorb the highest earnings as retained earnings given the fact that capacity utilization is only 75 percent. That is why despite the fact that the decline in RBI repurchase rates (ha) has had an insignificant impact on new investments that are at a minimum of 16 years, Jha said.
GST collections are in a minimum of 19 months, indicating a fall in the purchasing power of consumers, he added.