After exhorting “wealth creators” PM Modi reviews grappling economy with FM Sitharaman

Union Government remains tight-lipped on the current economic situation

Amid the impending economic slowdown in the country, Prime Minister Narendra Modi asserted the importance of the “wealth creators” in his 6th and longest Independence Day speech. The PM on the I-Day also “comprehensively” reviewed the state of the economy with Finance minister Nirmala Sitharaman reported PTI.

Back to back slowing productions in almost every sector and poor capital investment has forced the Center to scramble for solutions on plaguing slowdown, hurting economy at the cost of jobs.

The government is expected to bring sector-specific reforms by assessing its causes and future impacts. However, no official statement was issued regarding this meeting.

Country’s economic growth has slowed to 6.8 per cent in 2018-19 – the slowest pace since 2014-15, consumer confidence is waning and foreign direct investment has saturated.

Reserve Bank Governor had earlier this month stated that the slowdown is more cyclical than structural and the growth is expected to review by the fourth quarter.

On its part, the Reserve Bank of India, with inflation under its comfortable zone, reduced the key lending rate for the fourth successive time early this month to push economic activities. It has also asked banks to pass on the benefits of the rate cut to borrowers.

PM Modi exhorted the importance of the “wealth creators” while speaking about several decisions of his government, he did not make it clear on how the government is working to recover from the deteriorating economic situation.

What PM Modi said in his I-Day speech

For the “wealth creators” he said: “We have to come out of old beliefs. Both the people who create wealth and those who contribute to wealth creation are serving the county,” he said. “We need to respect wealth creators in India because if wealth is not created, how will it be distributed? And if wealth is not distributed how will it benefit the poor?” Modi asked people not to look with “suspicion” at wealth creators, whom he called the “wealth of the country”.

It is worth mentioning here that the Modi government had taxed the super-rich in the recent union budget.

Former FM Chidambaram tweets – The message was “Loud and clear” for the current FM and the tax officials

Former finance minister P Chidambaram Friday tweeted everyone should welcome three announcements Prime Minister Narendra Modi made on Independence Day. Chidambaram tweeted three key takeaways from Modi’s I-Day speech — considering keeping a small family to be a “patriotic duty”, respecting wealth creators and shunning single-use plastic.

Chidambaram said the current finance minister and tax officials must have noticed that out of the three, the second one was “loud and clear”, while the first and the third should become a people’s movement.

“Of the three exhortations, I hope the FM and her legion of tax officials and investigators heard the PM’s second exhortation loud and clear. The first and third exhortations must become people’s movements. There are hundreds of dedicated voluntary organisations that are willing to lead the movements at local levels.” he said in a series of tweets.

Grimmer situation

Signs of a deeper economic crisis are clearly visible while the government remains tight-lipped. The auto sector is facing its worst crisis in two decades and reports suggest thousands of job losses in the automobile and ancillary industry.

Country’s largest two-wheeler maker, Hero MotoCorp, said its manufacturing plants have been shut for four days till August 18 to adjust production in line with the current market demand.

In the FMCG sector, Hindustan Lever reported volume growth of 5.5 per cent in the April-June quarter compared to 12 per cent last year. Dabur posted a growth of 6 per cent against 21 per cent last year.

Britannia Industries recorded a volume growth of 6 per cent against 12 per cent in the same period last year. Asian Paints saw a volume growth slump from 12 per cent in the April-June quarter last year to 9 per cent this year.

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