Describing the current economic slowdown as “cyclical” and “temporary”, Union Minister Prakash Javadekar said Sunday that the country’s “fundamentals are strong”, and that the economy is on “strong footing”.
India’s GDP growth, which clocked an average of 7.7 per cent during 2014-18, contracted to 5% in the first quarter of the current fiscal year, the lowest in six years.
The Centre’s view that the slowdown is temporary echoes what the RBI said last month. Analysts differ, however, given that the slowdown stems from a sustained dip in investments. And the RBI’s rate cut notwithstanding, some constraints to growth are likely to continue.
Last month, the Reserve Bank of India, too, had said that the economy is going through a cyclical slowdown rather than a “deep structural” one. However, it had also warned that a broad-based downturn is underway in manufacturing, trade, hotels, transport, communication and broadcasting, construction and agriculture and that issues related to land, labour and agricultural marketing should be addressed.
Javadekar said the slowdown was “temporary” and that even during the UPA government’s term GDP growth had slumped to 5% in one quarter.
The Union Minister was addressing the government’s first press conference to mark 100 days in office, which was dominated by questions on the state of the economy.
“We have received the maximum FDI. Our fundamentals are very strong. There are sometimes issues of sentiment. There will always be some patches because the world over there is slowdown which also impacts markets here and people’s behaviour, as a result, also changes. We should not be worried too much. The government is responding with whatever actions are immediately necessary. This is a temporary phase,” he said, responding to one of many questions on the economic slowdown.
The minister’s constant refrain at the press conference was that there is nothing to worry. “Even an economic superpower like America has also faced a slowdown. This is temporary. We will march as per our plan. We will achieve our target of becoming a five trillion dollar economy,” he said in response to another question on the economy.
Referring to the recent decision to merge public sector banks, Javadekar was asked how two bad banks can make a good bank. He disagreed saying, “That is not always true. I was a banker, and I know that mergers carried out systematically will help because there will be a synergy between banks. This is the right step in the right direction.”
Asked to respond to Congress leader Rahul Gandhi’s tweet in which he took a dig at the Modi government by congratulating it for “100 days of no development”, Javadekar said, “I do not want to respond to criticism from a person who was missing for 90 out of those 100 days. Our work is visible to everyone. The speed with which this government has taken decisions is unprecedented.”
Counting the scraping of Jammu and Kashmir’s special status as one of the government’s major achievements in its first 100 days, Javadekar said that, barring a small terror act Saturday, not a single bullet had been fired in the Valley over the last 35 days.
He claimed that videos of unrest shown by the foreign media were old and said that Doordarshan was showing “the country’s truth”. “Pakistan knocked on many doors, but the international community is standing with us,” he said, a day after the United States expressed concern over the “widespread detentions” and “urged” Indian authorities to “respect human rights”.
Asked if the government is confused over what it should do with those excluded from the National Register of Citizens (NRC), he said, “The NRC was a result of the Assam Accord and its revision was ordered by the Supreme Court. Those who are aggrieved (about being left out) can approach the (Foreigners’) Tribunals. However, I do want to say that no country in the world will give rights to intruders. This is practice world over.”
The passage of the Triple Talaq Bill, the amendment to the POCSO Act and the launch of the Fit India Movement were cited as the government’s achievements in its first 100 days.
He also counted the Chandrayaan-2 mission as an achievement of the incumbent government.
He said that the Prime Minister’s attempt to console ISRO chief K Sivan showed the government’s “sensitive” side.