Nobel Economics Prize for Indian-American Abhijit Banerjee — who shared the award with Esther Duflo and Michael Kremer recently in his media interaction said that Indian Economy is doing very badly.
“The Indian economy is going into a tailspin; it is the time when you don’t worry so much about monetary stability and you worry a little bit more about demand, I think demand is a huge problem right now in the economy.”
“There is an enormous fight going on in India about which data is right and the government has a particular view…all data that is inconvenient to it is wrong. But, nonetheless…I think even the government is increasingly recognising that there is a problem. So, the economy is slowing very fast. How fast, we don’t know — there is this dispute about data — but I think fast.”
Meanwhile, Reserve Bank of India has cumulatively lowered the repo rate, or the rate at which it lends money to commercial banks, by 135 basis points since January with the latest 25 bps cut coming on October 4.
The central bank has also slashed its growth forecast for the country to 6.1% for 2019-20 from the 6.9% forecast in August, noting that the “continuing slowdown warrants intensified efforts to restore the growth momentum”.