Spokesperson: Dr. Anshul Avijit: He said that the Indian economy, one of the primary concerns of the Bharat Jodo Yatra, is confronting one bad news after another. The BJP government and its spin doctors, keep quoting high frequency data to camouflage the real health of the economy but nobody is fooled. Inflation remains high, unemployment is increasing and growth estimates are being revised downwards with each passing day.

The BJP government needs to take cognisance of the following facts and explain why it has allowed the economic situation to deteriorate to such levels:

1. The UNCTAD (United Nations Conference on Trade and Development) report on India’s GDP estimate for ’22-‘23 makes for disturbing news. India’s economic growth is expected to decline to a shocking 5.7 % this year from 8. 2 %. It is further expected to decline to 4.7 % in the year 2023-24.

2. This cut comes on the back of another downward revision of the GDP by the Reserve Bank of India last week, from 7.2 % to 7 %. The RBI governor has warned of extreme volatility and the need to anchor inflation expectations. The headline interest rate, the repo rate, was also increased by 50 bps to 5.9 % in another desperate bid to control price rise. From May this year, the repo rate has increased by 1.9 %.

3. Another point to note is that over the past three years, I GDP in India has grown just over 3%   and less than 4% since the last quarter before the pandemic. At such low levels of growth India cannot create more jobs or take measures to alleviate poverty.

4. Similar GDP estimate cuts have been also done by other financial institutions and rating agencies for the 2022-23. The pessimism regarding future growth is evident:

SBI 6.8 % from 7.5 % Fitch 7 % from 7.8 % Moody’s 7.7 from 8.8 % Goldman Sachs. 7 % from 7.2 %

5. The lack of contribution by the informal sector is a primary reason for the decline in GDP. According to an SBI report, the informal sector’s contribution to the GDP in 2017-18 was as much as 52 %. This has now plummeted to less than 20 %.

6. As many as 5,907 MSMEs have shut shop in the last two years indicating a high level of joblessness and distress.

The BJP government has repeatedly blamed the global economic crisis for its domestic woes. This is a smokescreen. The government is singularly responsible, since all our economic indicators were floundering even before global events laid siege. Tuesday, October 4, 2022