MoS Finance hits backs at Rahul Gandhi over jibe on economy, highlights Congress' woes

On Thursday, MoS Finance Anurag Thakur lashed out at former Congress president Rahul Gandhi for his comment on the state of the Indian economy. Referring to the 'State of the Economy' article in the RBI's monthly bulletin, Gandhi mentioned that India had entered into recession for the first time in history. Moreover, he alleged that Prime Minister Narendra Modi's policies had turned India's strength into its weakness.

Calling upon Gandhi to focus on his own party, Thakur contended that discontent is brewing against him in Congress. In the context of Congress winning just 19 out of 70 seats in Bihar, he urged the Wayanad MP to introspect on his party's reducing vote bank. Earlier in the day, Congress General Secretary Tariq Anwar and senior leader PL Punia opined that Congress must introspect about their loss in the Bihar Assembly election. 

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RBI's prediction for the Indian economy

During the April-June quarter, India's GDP contracted by 23.9%. All sectors barring agriculture recorded negative GDP growth during this quarter. This was attributed to the fact that India was among the economies worst hit by the COVID-19 pandemic. Elaborating on the state of the economy, the Centre noted that restrictions were imposed on non-essential economic activities and movement of people from March 25 to contain the spread of COVID-19. It maintained that this had an impact on economic activities as well as data collection mechanisms.

On Wednesday, the RBI predicted that the GDP will contract by 8.6% in the July-September quarter. As this will be the second consecutive quarter where the GDP growth rate is negative, it is believed that the Indian economy will enter into a recession phase at the end of the first half of 2020-21. At the same time, the RBI has stated that the economy will return to positive growth in the October-December quarter of 2020-21. It has identified certain risk factors for the growth of the economy such as the pressure of inflation and the possibility of a second wave of COVID-19.

On Thursday, Union Finance Minister Nirmala Sitharaman announced 12 new measures to boost the economy. During her interaction with the media, she exuded confidence in the strong recovery of the economy, citing the boost in demand with the fall in active COVID-19 cases. The RBI will formally announce the GDP estimates for the second quarter at the end of November. 

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