New Delhi, Oct 25 : Congress party expressed its concerns regarding the recent economic trends outlined in an RBI bulletin. It alleged that the economy has suffered due to mismanagement by the BJP-led Central government, leading to widespread suffering among the majority of Indians.
The opposition party also raised serious alarms about inflationary trends consistently exceeding the Reserve Bank of India’s (RBI) target of 4 percent.
Jairam Ramesh, Congress general secretary, cited the October 2023 RBI bulletin, which he claimed showcased deeply troubling economic trends, illustrating the ongoing mismanagement of India’s economy under the Narendra Modi government.
Ramesh recalled that the September bulletin revealed several negative indicators, including a 47-year low in the savings growth rate, stagnation in domestic credit to the private sector, and a stagnant labor-force participation rate. He noted that these trends have either persisted or worsened.
A significant factor contributing to the low net savings growth was a substantial increase in household liabilities. While the finance ministry attributed this spike to home and vehicle loans, the September bulletin indicated a 23 percent increase in gold loans and a 29 percent increase in personal loans.
Ramesh highlighted that the October RBI bulletin confirmed this fact, revealing that personal loans were the most substantial contributor to bank credit growth in August 2023, growing at a significant 23 percent, with gold loans increasing by 22 percent.
Ramesh emphasized that for the past 15 months, non-housing personal loans have been growing at over 20 percent, a trend unprecedented in at least 15 years.
Moreover, credit growth to the industrial sector, essential for investment and economic growth, has significantly slowed down, reaching just 6.1 percent year-on-year in August, nearly half of the previous year’s rate and only one-third of the level in 2013.
Ramesh contended that the Modi government has reduced the share of bank credit to the industry by half, from 46 percent of non-food credit in 2013 to just 24 percent in 2023.
Inflation remains a pressing concern at 6.8 percent, well above the RBI’s target of 4 percent. The RBI cited “sustained inflationary pressures in cereals, pulses, and spices.”
Ramesh claimed that the majority of Indians continue to grapple with rising prices, making it difficult to meet basic food, education, and other necessities.
He also criticized the BJP government for a ballooning fiscal deficit, which has grown by almost 20 percent over the past year, surpassing Rs 6.4 lakh crore in Q1 of 2023-24. The government’s growing debt burden and its tactics to reduce tax transfers to states in an attempt to show a smaller deficit were highlighted.
Ramesh pointed out the shortcomings of the “Make in India” initiative and the ineffectiveness of production-linked incentive (PLI) schemes, which are evident in sluggish export growth in the current quarter, at less than 4 percent. He stated that the worst-hit by the export decline are MSMEs, facing lower profits and higher costs, and export growth has more than halved under the Modi government compared to the previous decade.
In summary, Ramesh contended that the economy has been mismanaged, and many Indians are grappling with financial challenges, while the government’s fiscal deficit and export growth have raised concerns about the overall economic situation.
