Indian economy experienced abrupt slowdown in 2019, but it's not in a recession: IMF MD
Washington: The Indian economy experienced some abrupt slowdown in 2019 due to turbulence in non-banking financial institutions and major reform measures such as GST and demonetisation, but it is not in a recession, IMF Managing Director Kristalina Georgieva has said.
"The Indian economy indeed has experienced an abrupt slowdown in 2019. We had to revise our growth projections, downwards to four percent for last year. We are expecting 5.8 per cent (growth rate) in 2020 and then an upward trajectory to 6.5 percent in 2021," Georgieva told a group of foreign journalists here on Friday.
"It appears that the main reason for this slowdown was the non-banking financial institutions experiencing a turbulence," she said on the eve of Union Finance Minister Nirmala Sitharaman presenting the annual budget in Parliament on Saturday.
She said India had undertaken some important reforms that over the longer term would be beneficial for the country, but they do have some short-term impact.
"For example, coming with the unified tax system, and the demonetisation that took place. These are steps that over time are beneficial, but of course they might, might be somewhat disruptive over short term," Georgieva said in response to a question.
The International Monetary Fund (IMF) Managing Director said that there is not a lot of fiscal space in India. But we also recognise that the policies of the government on that side, on the fiscal side have been prudent. We will see how the reading of the budget, the submission of the budget goes, tomorrow, she said.
In the medium-term, she said, the IMF remains optimistic about India. This is why we see that upswing potential for the growth in the country, she said.
Georgieva said that the current economic slowdown cannot be described as a recession. "No.... You're far from that. But it is a significant slowdown, not the recession," she said.
The IMF managing Director noted that the consumption in India also slowed down and that contributed to the overall slowdown in the economy. The IMF would be keen to see what India does to get relatively sound macroeconomic fundamentals to pay off in terms of better growth trajectory, she said ahead of the budget.
One thing that is important for India is that budgetary revenue have been below target. "The country knows that. The finance minister knows it. They need to increase budgetary revenue collection so they can improve their fiscal position. I said it's tight on the spending side, but I also want to stress that there is room to improve collection on the revenue side," she said.
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PM Modi is controlled by Donald Trump, wants to do the same in TN: Rahul Gandhi
Ranipet (Tamil Nadu) (PTI): Congress leader Rahul Gandhi on Saturday alleged that Prime Minister Narendra Modi was being "controlled" by US President Donald Trump and that the PM wanted the AIADMK to capture power so that he could control Tamil Nadu Chief Minister.
Also, he claimed that the prime minister "handed out our energy security and gave away our data, besides selling our farmers and small and medium industries."
"You saw yesterday (in Parliament) the face of Prime Minister Narendra Modi completely lacking confidence," Rahul said on the delimitation bill.
"He (PM) could not even face the opposition. He was sitting sideways. And the reason is, he is controlled by the United States. He signed the India-US deal that sold our country out," Rahul said while addressing an election rally here.
He further said, "Today, if Donald Trump tells Modi to jump, Modi jumps. If Donald Trump tells Modi to lie down, Modi lies down. Why? Because Donald Trump controls Modi fully. How does he control him? He controls through the Epstein files. He controls him because he knows Modi's financial systems and understands Modi's link with Adani," the Congress leader alleged.
Just as he was being controlled by Trump, Modi wanted to do the same to the chief minister of Tamil Nadu. "That is why he wants to put AIADMK in power in TN," Rahul said.
The Union government had rejected references to PM Modi in the latest Jeffrey Epstein case files, describing it as “little more than trashy ruminations by a convicted criminal that deserves to be dismissed with the utmost contempt”.
