Trust deficit among people has led to economic slowdown: Congress

Accusing central government of the economic slowdown, Congress national spokesperson Supriya Shrinate said that the government is creating a trust deficit because of which the people are not taking credits. Citing an RBI report, the party claimed that 88 per cent drop has been witnessed in credit to commercial sectors.

New Delhi:Expressing concern over the present state of the country's economy, the Congress on Monday accused the Centre of creating a trust deficit because of which the people are not taking credits, eventually leading to slowdown.

Citing an RBI report, the party claimed that 88 per cent drop has been witnessed in credit to commercial sectors, while 5 per cent growth rate as claimed is not incommensurate with the drop in credit, implicitly questioning the authenticity of the government data.

"If you have a fever and you go to a doctor but the doctor is not ready to accept that you are ill, then how he will treat you. It seems that this government is bewildered. It is almost like Alice in Wonderland. They do not know what to do with the economy. That is why we see the collateral damage is happening," said Congress national spokesperson Supriya Shrinate told reporters here.

"No investment, no consumption, no credit off-take. It is a very vicious cycle," she said. "The government claims that there is 5 per cent growth but with 88 per cent drop in credit is not incommensurate with its claims," she added.

"Simple economy says that when credit is taken, investment is made and jobs are created and thus growth takes place," said Shrinate.

"But people are not taking credit because they don't believe that if they take credit, then they would be able to repay it because they are not sure whether their jobs will remain or not," said she.

"Further, the demand is low. The government is continuing with its piecemeal approach and does not have a comprehensive solution to the economic mess. The fault lines are vivid in the Indian economy," said she.

"As per the RBI survey, the people's confidence has plummeted to 6 years low. Over 50 per cent of people are no longer convinced that jobs would be created. Private and public investment and exports have been badly hit," she said.

The RBI has cut repo rate by 25 basis points to 5.15 per cent, bringing the cumulative reduction in the interest rate of 135 basis points for this calendar year. However, it also lowered the GDP growth forecast to 6.1 per cent for FY20 from 6.9 per cent earlier.