The RBI and government must do whatever it takes to end the demand slump

The RBI governor mentioned he’s willing to do “whatever it takes”. He has to follow this up. The government for its part has to nudge small savings and deposit rates lower to help transmission.

Written by Harsh Gupta , Karan Bhasin | Updated: December 5, 2019 10:31:46 am

The RBI and government must do whatever it takes to end the demand slump

India’s economic growth slipped to a three-year low of 5.7 per cent in April-June as disruptions caused by demonetisation spilled over to the third straight quarter amid slowdown in manufacturing activities (File Photo)

Growth has sharply slowed — for Q1 FY19 it was 8 per cent while for Q2 FY20 4.5 per cent. A casualty of this is the debate on India’s official growth statistics as nobody credible seems to question them anymore. Moreover, we must remember that the average growth rate for the NDA between 2014-19 was at 7.5 per cent while under UPA-2 it was at 6.9 per cent.