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NITI Aayog Vice-Chairman Dismisses Reports Of A 'Gloom And Doom' Economy

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| September 29 , 2017 , 08:29 IST

In the wake of BJP leader and former Finance Minister Yashwant Sinha's write-up on the current state of the economy, which he described as being in a 'mess', others have weighed in on the status of the economy as well.

Amid the debates, government think tank NITI Aayog's vice-chairman Rajiv Kumar spoke to TOI regarding the current state of the economy, saying that growth is expected to rebound in the quarters ahead and that the economy is not in a 'gloom and doom' situation.

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"I completely disagree with this formulation of gloom and doom, economy in a tailspin and so on. The reason is very simple. You don't have an economy in gloom and doom where automobile industry has grown by 8%, civil aviation has grown by 13%, where you have cement sales rising, and commercial vehicles sales - which is supposed to be a leading indicator - showing a growth of 13% or 14%. This downswing, I think, is bottoming out," said Kumar.

"A mild recovery should begin in the third quarter itself from 5.7% to around 6%. I want to make it clear that any impact of demonetisation is by far over and done with. You stop talking about it because demonetisation was over in some sense in December," he continued.

"My take is: Yes, the demand has been affected. But the economy should afford that much cut in demand because you have cleaned it up. Demonetisation was the pragmatic way of cleaning it up, but the only thing that I want to say is that don't chase it too much now," Kumar said.

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"The India story is still very good abroad, as reflected in the strong FDI inflows in the last three years," he added.

"The domestic investor is not sure about the rules of the game, due to GST, demonetisation, Aadhaar. The government should consider removing this uncertainty from the atmosphere and, maybe, make some announcements which will tell the investors, `Look, we know what our path is. We are telling you this is what the government intends to do in these particular sectors and these are the clear rules of the game and these will not change,'" Kumar said.

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"You have to boost confidence and communicate the goods news much better. You have not done it. The Cassandras and the tailspin-wallahs are having an upper hand because there is no counter available. The government could announce large big-ticket investments. Not in PPP, not in hybrid equity -simple EPC contracts. Regulatory uncertainty should now be stopped," the NITI Aayog VC said.

After Yashwant Sinha's write-up slamming the state of the economy saying that a further fall-out is imminent, his son, union minister Jayant Sinha wrote a piece in response contradicting Yashwant's views saying that the nation is on the verge of a 'new economy'.