Niti Aayog Vice Chairman Rajiv Kumar Presses Alarming Bell on Economic Slowdown, Says Unprecedented Situation for Govt in 70 Years

New Delhi: In a major embarrassment to the Modi Government, Niti Aayog Vice Chairman Rajiv Kumar has described the current economic slowdown as an “unprecedented situation that India has not faced in last 70 years”.

His comments have come at a time when the country’s economy is facing the worst pace of growth in nearly five years.

Speaking to news agency ANI, Kumar said, “From last 70 years, government of India has not faced this sort of liquidity situation where entire financial sector is in churn and nobody is trusting anybody else”.

He further said that the government is considering a number of measures which will be taken at an appropriate time to deal with financial stress and unleash animal spirit in the economy. Both the government and the RBI have taken a series of measures to deal with stress in the financial sector triggered by default in the group companies of IL&FS.

He said the RBI has reduced repo rate four consecutive times this year and also directed the banks to pass rate cut benefits to borrowers.
Kumar further said that the government has taken a series of measures to improve the financial health of the NBFC sector. The government permitted public sector banks to purchase high-rated pooled assets of financially sound NBFCs. The partial guarantee would help rework the Asset Liability structure within three months to have positive Asset Liability Management in each bucket for the first three months and on cumulative basis for the remaining period.

As per the guidelines issued, the window for one-time partial credit guarantee will be for a period of six months, or till such date by which Rs 1 lakh crore assets get purchased by banks.