Urban Mirror Correspondent
New Delhi August 10: The Lok Gathbandhan Party (LGP) today said the NDA government’s euphoria over a positive IMF report on the country’s growth projection is misplaced as rising global oil prices and possibility of slippage in GST collections alongwith rising inflation have all the potential to derail the whole annual assessment during the current fiscal. The LGP said the Indian economy is yet to come out of morass and lingering impact of demonetization and rolling out of goods and services tax (GST) in a haphazard way is still continuing.
The spokesman of the party said here on Friday that the IMF while projecting 7.5% growth has decided to against pressing any panic button on increasing inflation rate of 5.2% that is well above the Reserve Bank of India’s target of 4% and monetary policy can therefore be expected to be tight. The spokesman said despite projecting higher growth the IMF has clearly emphasized that “risks are tilted to the downside from external factors, such as higher global oil prices and tighter global financial conditions, as well as domestic financial vulnerabilitiesâ€. The spokesman said the country has still been facing innumerable issues which have not been addressed properly. Taking the IMF’s prognosis with a pinch of salt the spokesman said it has not been accurate even in the past also. The spokesman said in February 2017, during last year’s assessment, the IMF said the real GDP growth in 2016-17 would be 6.6% in 2016-17 and 7.2% in 2017-18. But it turned out at 7.1% in 2016-17 and 6.7% last fiscal.
The spokesman said the slowdown in the country has been largely self-inflicted because of bad debt crisis, directionless decision to ban high denomination currency notes in November 2016 and poorly planned roll out of new goods and services tax (GST). The spokesman said all these factors led to push the growth well below 6% in the past. The spokesman said under the prevailing situation the cheer for IMF projections when these disruptive forces are still at play is illogical. The spokesman said fiscal deficit is extremely troubling which would further make the GDP revival unsustainable. Pointing out that inflationary tendency continues unabated, the spokesman said recent increase in bank lending rates and fallout of mega PNB scandal will also choke off revival in private investment. The LGP said there is urgent need to correct the aberrations on economic and fiscal policies and take stringent measures to ensure honesty, transparency and elimination of corruption to solve the problems of the teeming millions.
