Senior Congress leader and former Union Finance Minister P Chidambaram on Tuesday criticised the Narendra Modi government over the state of the economy. The Congress leader’s tweets were posted by his family.

“Good economics points to one direction, Mr Modi’s government points to the opposite direction,” said Chidambaram, who is in Tihar Jail at present in connection with a corruption case.

He congratulated Indian-American economist Abhijit Banerjee, who won the Nobel Prize in economics on Monday. “We remember with gratitude his contribution to the Congress manifesto,” said the former Union minister. He advised the government to listen to Banerjee and former Reserve Bank of India Governor Raghuram Rajan’s warnings about the state of the economy.

Abhijit Banerjee on Monday said the decline in Gross Domestic Product growth rate, which slipped to 5% in the April to June quarter, was a big concern.

“I think it is a worry, it is a very serious concern,” he told CNBC-TV18. “The general trickle down is going to slow down, partly. More importantly, one of the key channels of transmission of income from the urban growth centers to the rural places, where income isn’t directly growing so much, has come to real estate and real estate is right now in a crisis.”

He added that the government should conduct pilot studies and evaluate poverty alleviation policies before implementing them. He said there was a willingness in India to announce new policies because they “sound good” or have a political purpose.

On October 9, Raghuram Rajan had said during the OP Jindal lecture at Brown University in the United States that India’s fiscal deficit concealed a lot of problems and might push the economy to a “worrisome situation”.

On Tuesday evening, the International Monetary Fund lowered India’s growth rate projection to 6.1% for the 2019-’20 financial year because of “sector-specific weaknesses”. In July, it had revised India’s growth forecast from 7.3% to 7%. The revised projections come at a time when the economy is facing a sustained decline in growth.

Also read

Abhijit Banerjee’s prescription for Indian economy: ‘Stop PMO interference, raise NREGA wages, pray’

Now, follow and debate the day’s most significant stories on Scroll Exchange.