Union minister Suresh Angadi on Friday said the Indian economy was “doing fine” and claimed that it grows through a decline in demand every three years, PTI reported. The Minister of State for Railways made the remarks on the day Business Standard reported that consumer spending – the total value of goods and services that households spend on – had declined for the first time in more than forty years in 2017-’18.
“Airports are full, trains are full, people are getting married,” Angadi said in Uttar Pradesh during inspection of the Eastern Dedicated Freight Corridor. The Lok Sabha MP from Belgaum, Karnataka, asserted that the economic slowdown would soon be over. “Some people are for nothing maligning the image of Narendra Modi,” he said, according to The Indian Express. “It is a cycle. Then the economy picks up also.”
The information on the significant decline in consumer spending was accessed by the newspaper from an unreleased National Statistical Office report. The office had reportedly not made it public so far due to the “adverse findings”, officials said.
The survey, conducted between July 2017 and June 2018, showed that the monthly per capita consumption expenditure was Rs 1,446 in 2017-’18, compared with Rs 1,501 in 2011-’12 – a decline of 3.7% in six years. The decline was primarily because of rural areas, where consumer spending fell by 8.8%. The figure rose by 2% for urban areas. The figures were in real terms, which meant they had been adjusted for inflation.
The survey was conducted only a few months after demonetisation, and while the Goods and Services Tax was implemented. However, it was unclear when the decline began.
Indian economic slowdown
India has been struggling with an economic slowdown for several months. The economic growth rate slipped to a six-year low of 5% in the April-June quarter. This was the fourth straight quarter of slowdown.
Industrial output in September contracted 4.3% when compared to same month last year. This was slower than the the 1.1% contraction in August, which was the worst figure in six years. The output had grown 4.6% in July, and 4.8% in September 2018.
Credit rating agency Moody’s Investors Service also revised its outlook on the Indian economy from “stable” to “negative”, citing increased risks that are likely to keep Gross Domestic Product growth slower than in the past. Last month, the International Monetary Fund lowered India’s projected growth in the current financial year to 6.1% but said it would rebound to 7% in the 2020-’21 financial year.
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