A gradual meltdown in the equity markets, widespread losses in the automobile sector and an Index of Industrial Production (IIP) that is currently at a more than four-year low, have in the last few days led to concerns over the state of the country’s economy.
The situation has not gone unnoticed and a slew of experts including industry leaders and former policymakers have spoken out, highlighting an impending crisis.
Here is a look on how various stakeholders have reflected upon the scenario in the recent past:
Will Growth Fall From Heavens?: Rahul Bajaj
Speaking at the 12th AGM of Bajaj Auto, the company’s Chairman Rahul Bajaj said that the government has failed to create demand and boost private investment.
“There is no demand and no private investment, so where will growth come from? It doesn’t fall from heavens. The auto industry is going through a very difficult period. Cars, commercial vehicles and two-wheelers are going through a rough patch,” Bajaj said in his speech.
Significantly, during the April-June quarter, the automobile industry saw a 12.3 percent drop in sales. Passenger vehicle segment comprising cars, SUVs and vans reported the highest fall at 18.4 percent, followed by commercial vehicles, which fell 16.6 percent.
Private Sector in Challenging Times: L&T Chairman
Earlier this month, AM Naik, chairman of infrastructure major Larsen & Toubro (L&T) termed the current situation as ‘challenging’ for the private sector.
“Only one-third (of companies) is able to keep what they have,” he said in an interview to Business Standard, further casting doubt on the government’s claim of more than 7 percent growth in this financial year.
Slowdown is Here: HDFC Chairman
Merely a day after Naik spoke, HDFC Chairman Deepak Parekh on Friday, 2 August, acknowledged a slowdown in the economy, adding that the problem has worsened due to reluctance in lending by non-banking finance companies (NBFCs) and banks.
“Banks are reluctant to lend and there has been a flight to safety where a select few, high-rated NBFCs and HFCs have access to funding while for several others, access to credit has been choked,” he said at the AGM of HDFC.
Tax Terrorism Widespread: Mohandas Pai
Following the suicide note of Café Coffee Day owner VG Siddhartha, wherein he cited harassment he faced from a senior Income Tax official, former Infosys Director, Mohandas Pai spoke against “tax terrorism” by the government.
Speaking to The Quint, “Corporate India is very scared but this is not something that has been happening for the last five years, it has been there for 20 years under the radar. In Infosys, as CFO, I faced this tax terror,” he said.
Taxation Amid Slowing Economy Killing Market's Animal Spirit: Former RBI Governor
News agency IANS quoted former Reserve Bank of India Governor D Subbarao as saying that the government's attempt to squeeze out RBI reserves is a sign that it is desperate and that it could well be killing the animal spirit of the financial markets.
Also, in what can be termed as the first admission of a slowdown, from within the government, Niti Aayog CEO Amitabh Kant on Saturday, 3 August, attributed slowdown to reforms effected by the government.
“One of the reasons for the slowdown is that it has had too much of reforms – GST , IBC, RERA – a huge set of reforms which we have undertaken and I think the next round of reforms must revolve around sectors like oil and gas, mining, coal,” he said at a summit.
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