Congress Cites RBI Data to Claim Financial Distress in the Country
On Wednesday, the Congress alleged that the Modi government”s mismanagement has led the country to financial distress, citing recent RBI bulletin data. In a statement, Congress general secretary Jairam Ramesh raised concerns over certain RBI indicators that reveal adverse economic trends, including a 47-year low in the savings growth rate, stagnation of domestic credit to the private sector, and a flat labor force participation rate.
“These trends either remain or have worsened: A major reason for the low net savings growth is that there was a huge spike in household liabilities. Despite the finance ministry”s misleading claim that this spike is due to home and vehicle loans, the September bulletin had clearly shown there was a 23% spike in gold loans and a 29% spike in personal loans,” Ramesh said in a statement.
“The October RBI bulletin confirms this fact — personal loans were the single largest contributor to bank credit growth in August 2023, and grew at a massive 23%, while gold loans grew at 22%,” the former Union minister added.
“Each month”s RBI bulletin should serve as a reminder to the Modi government that as much as it tries to hide data and mislead the public, the basic facts do not lie — the economy has been completely mismanaged and the vast majority of Indians are suffering.”
In fact, for the last 15 months, non-housing personal loans have been rising at over 20%, something that has never happened in at least 15 years, while industrial credit growth has been slowing down. Industrial credit growth stood at 6.1% year-on-year in August, which is almost half compared to 2013.
Ramesh also pointed out that the share of bank credit to industry has been halved by the Modi government — from 46% of non-food credit in 2013 to just 24% in 2023.
“Inflation remains out of control at 6.8%, way above the RBI”s target of 4%. The RBI raised the issue of “sustained inflationary pressures in cereals, pulses, and spices”,” Ramesh said.
“The vast majority of Indians continue to face the pressure of price rise on their incomes, finding it difficult to meet basic food, education, and other necessities.”
Ramesh added that while Prime Minister Modi lectures others on “revdi” (freebies) and fiscal responsibility, the BJP government”s fiscal deficit is ballooning.
“It has grown by almost 20% over the past year to over Rs 6.4 lakh crore in Q1 of 2023-24. The Modi government is incurring debts that will weigh India down in the future, and to show a smaller deficit, is violating all principles of federalism by reducing tax transfers to states,” he said.
The spectacular failure of the government”s “Make in India” initiative and the ineffectiveness of the production-linked incentive (PLI) schemes are evident in the sluggish export growth in this quarter, at less than 4%, Ramesh said.
“The worst-hit by the export slump are MSMEs, who face lower profits and higher costs. This is not a new trend — while from 2004-2014, exports grew at an average of 14% per year, under the Modi government, export growth has more than halved, at only 6%.
