Jairam Ramesh Gets RBI Deputy Governor's Validation For 'Inflation, Lack of Demand' Claim
Congress General Secretary in charge of communication Jairam Ramesh on Saturday highlighted the economic issues faced by the country, including the sluggish manufacturing growth and the rising inflation. The Rajya Sabha MP shared an interview transcript involving Dr. Michael Patra, the Deputy Governor of the RBI, noting that the current economic situation is very well articulated in the conversation.
The Congress leader cited Patra to note that the economy is not moving ahead as fast as it should because the private investment was not picking up, and the sluggish manufacturing growth. Both were triggered by by lack of demand from consumers who are being hit by inflation, the RBI deputy governor said.
Jairam Ramesh had last week pointed out the rising inflation and the slowdown in the private consumption. He claimed bankruptcy was affecting the middle class and poor, lowering the demand for products in the country.
Dr. Michael Patra, the Deputy Governor of the RBI, has summarised the current economic situation very well in this interview of the RBI’s top officials to Business Standard.
Dr Patra says the economy is not moving ahead as fast as it should because –
(i) private investment is… pic.twitter.com/Hj5eH1p9bD
— Jairam Ramesh (@Jairam_Ramesh) December 7, 2024
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The RBI deputy governor, while answering the question regarding how he got the growth estimates for quarter 2 wrong, elaborated, “If you look at demand, the main problem is investment. On the supply side, the main problem is manufacturing. The two are intertwined.”
The deputy governor pointed out that the biggest issue in the manufacturing is the slump in sales growth, adding that it is reflecting inflation hitting the urban consumer.
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“So when sales growth is down, companies do not want to invest in new assets because they see demand as moderate and it can be met from existing capacity,” Patra said in an interview published by Business Standard on Friday, highlighting that the underlying slowdown in growth is due to inflation.
The Congress leader in another post last week accused the Union Government of suppressing and manipulating inflation data, unemployment’ data, among others. He said the government was showing that the inflation was under control while the actual ground reality was quite the opposite, leaving the people struggling in the financial distress.
