First from the left - Rathin Roy (Photo: IANS)
Even though the Narendra Modi government claims to have a healthy economy, one of the prime minister's economic advisors has that the country's economy was heading towards a structural slowdown. Rathin Roy, member of the Prime Minister's Economic Advisory Council and Director of National Institute of Public Finance and Policy, said that India's economy was running into a structural crisis and may soon join the "middle-income" countries such as South Africa and Brazil.
"We are heading for a structural slowdown. This is an early warning. The economy since 1991 has been growing not on the basis of exports... but on the basis of what the top 100 million (10 crore) of the Indian population wants to consume," NDTV quoted Roy as saying.
Roy said that those 10 crore Indian consumers, who were powering the country's economy, have now started to plateau out and India eventually will become like Brazil and South Africa with large number of poverty leading to increased crimes.
"It means in short we will not be South Korea. We will not be China. We will be Brazil. We will be South Africa. We will be a middle-income country with large numbers of people in poverty seeing rising crimes. In the history of the world. Countries have avoided the middle income trap but no country once in it, has been able to get out of this," he said.
The remarks by one of the prime minsiter's economic advisors came days after the Finance Ministry, in its monthly economic report for March revealed that the country's economy have slowed down in 2018-19 due to lower private consumption, tepid growth in fixed investment and muted exports.
The Central Statistics Office (CSO), which released the national account data for the third quarter, had in February revised downwards the growth estimate for 2018-19 fiscal to 7 per cent from 7.2 per cent. The 7 per cent growth is the lowest in 5 years.
The Opposition parties have been criticisng the Narendra Modi government for "destroying" the Indian economy by its "disastrous decisions" such as demonetisation and "poorly implementated" Goods and Services Tax (GST).