The Congress today presented their view of the economic scenario prevailing in the country, hoping that the Finance Minister Nirmala Sitharaman takes note of the situation when she will present her seventh union budget on July 23.
Addressing a press conference at the AICC headquarters here today, party spokesperson and Chairperson, Social Media and Digital Platforms, Supriya Shrinate referred to some serious challenges being faced by India’s economic landscape.
“Wheels of the economy are stalled as there is slow consumption, sluggish investment and huge trade deficit”, she remarked.
Shrinate disclosed that 48% families in the county are victims of financial crisis, whose expenses outweigh their income. She said, people were bearing the double whammy of high unemployment and back breaking inflation.
“Household debt has skyrocketed to 40% of GDP and household savings have plummeted to lowest levels in 50 years”, she said, while pointing out that the “alarming economic inequality in the country was even more acute than during the Colonial rule”.
The Congress spokesperson said, the Finance Minister must have met some sections of industry, but she has not met the real India like the common people, the farmers, the unemployed youth and those crushed under back breaking prices.
She said, the government's economic mismanagement and knee jerk policies like demonetisation, half-baked GST and inefficient COVID management cost the economy ₹11.3 lakh crore and resulted in loss of 1.6 crore informal sector jobs.
She said, 2.7 lakh central PSU workers have lost their jobs during Modi’s tenure. She disclosed that the share of contract workers has shot up from 19% in 2013 to 43% in 2022!
Referring to growing economic disparities and inequalities, she said, the country has more inequality today than under British colonial rule. “The ever widening gap between the super rich and the rest of India is frightening with the top 1% today controlling more than 40% wealth in the country”, she pointed out.
On backbreaking prices, Shrinate said, common people are reeling under high prices. “Retail inflation has surged, food inflation has been persistently close to the 9% mark for month after month”, she said, adding, food inflation for the month of June is at 9.55% and vegetable prices sold by over 27%”
Contesting the “misleading” growth figure of 8.2% for FY24, she said, the largest component of GDP - Private Consumption accounting for 2/3rd of India’s GDP has grown at a 20-year low of only 4%.
Quoting the latest reading of the Household Consumption Expenditure Survey, she revealed that almost half this country does not eat three meals a day.
She said, according to the Federation of Automobile Dealer Association, the Auto sector was sitting on the highest ever inventory. “Unsold inventory has soared to ₹60,000 crore - that’s another sign of low consumption”, she added.
Shrinate said, India’s poor and middle class have never been taxed as steeply as now. “The reality is that 50% of India’s poorest pay 64% of all GST collected”, she pointed out.
Expressing concern over the agriculture sector, she said, it was most worrying that growth in this sector had come down to just 1.4% against 4.7% in the previous financial year. She said the agricultural sector allocation had decreased drastically from Rs 1.33 lakh crore in FY23 to Rs 1.25 lakh crore in FY24.
She observed this was a big concern for rural economy, rural demand and for India’s food security. She said legal MSP is the only solution to address the woes of India’s farmers but doubted whether the government will pay any heed to that.
On investment she said private investors from Indian industry have clearly refused to put their money where their mouth is. “Low consumption, arbitrary policies, rampant cronyism, favouring a few monopolies and the ED/IT/CBI raids have dampened the animal spirits of Indian industry who are increasingly making key investments overseas”, she said.
Foreign Direct Investment, she disclosed, has been slowing down, and touched a five-year low of $44.4 billion in 2023-24, declining from the $59.6 billion in 2020-21.
About trade imbalance, she said, India currently has a trade deficit with 9 out of 10 top trading partner countries.
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