All India Congress General Secretary Jairam Ramesh said the RBI Bulletin of October 2023 shows extremely concerning economic trends and demonstrates the Modi government’s continuing mismanagement of India’s economy.
He recalled that in the September 2023 bulletin, a range of negative indicators were revealed, including a 47-year low in the savings growth rate, a stagnation of domestic credit to the private sector, and a flat labour-force participation rate.
These trends either remain or have worsened: A major reason for the low net savings growth is that there was a huge spike in household liabilities, he said.
Despite the Finance Ministry’s misleading claim that this spike is due to home and vehicle loans, the September bulletin had clearly shown there was a 23% spike in gold loans and a 29% spike in personal loans, he said.
The October RBI bulletin confirms this fact — personal loans were the single largest contributor to bank credit growth in August 2023, and grew at a massive 23%, while gold loans grew at 22%.
In fact, for the past 15 months, non-housing personal loans have been growing at over 20% — something that has never happened in at least 15 years, he said in a press statement of October 25, 2023.
Meanwhile, credit growth to the industrial sector, which is essential for investment and economic growth, is slowing down. It was just 6.1% y-o-y in August 2023, almost half of what it was last year and only one-third the level in 2013, he said.
The share of bank credit to industry has been cut in half by the Modi government — from 46% of non-food credit in 2013, to just 24% in 2023. • Inflation remains out of control at 6.8%, way above the RBI’s target of 4%.
The RBI raised the issue of “sustained inflationary pressures in cereals, pulses, and spices.” The vast majority of Indians continue to face the pressure of price rise on their incomes, finding it difficult to meet basic food, education and other necessities.
While the PM lectures others on ‘revdis’ and fiscal responsibility, the Modi government’s fiscal deficit is ballooning. It has grown by almost 20% over the past year, to over Rs. 6.4 lakh crore in Q1 of 2023-24, he said.
The Modi government is incurring debts that will weigh India down in the future, and to show a smaller deficit, is violating all principles of federalism by reducing tax transfers to states, he said.
The spectacular failure of ‘Make in India’ and the ineffectiveness of the PLI schemes is evident in the sluggish export growth in this quarter, at less than 4%. The worst-hit by the export slump are MSMEs, who face lower profits and higher costs, he said.
This is not a new trend — while from 2004-2014 exports grew at an average of 14% per year, under the Modi government export growth has more than halved, at only 6%.
Each month’s RBI Bulletin should serve as a reminder to the Modi government that as much as it tries to hide data and mislead the public, the basic facts do not lie — the economy has been completely mismanaged and the vast majority of Indians are suffering.
