'This is Demon 2.0': Rahul Gandhi launches searing attack on Centre

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The Centre must allow cash support to people and the small scale industries to lift the economy, underscored Congress’ Rahul Gandhi on Saturday, tagging a Hindustan Times report to make his case.

“Govt actively destroying economy by refusing to give cash support to people, MSMEs. This is ‘Demon 2.0,” tweeted the Congress leader.

Govt is actively destroying our economy by refusing to give cash support to people and MSMEs.

This is Demon 2.0.https://t.co/mWs1e0g3up

— Rahul Gandhi (@RahulGandhi) June 6, 2020

It was not immediately clear if he meant demonetisation or simply calling the government a demon. By all accounts, it seems he was advocating the former.

The Reserve Bank of India (RBI) expects the Indian economy to contract in the current fiscal year. But given the recent release of GDP numbers for the quarter ending March 2020, a big-picture analysis may be needed, what the HT aims to do in a three part series, the first of which was tagged by Rahul Gandhi. The first part will look at the economic situation before the pandemic and dwell on its nature and causes.

The Congress has been arguing that money be directly given to the poor. They have been saying that Rs 7,500 must be immediately given to the poor and Rs 10,000 as one time first payment to tide over the economic woes. The currently and economy are presently reeling under the effect of a long-drawn nationwide lockdown necessitated by the coronavirus pandemic.

To be sure, the Covid-19 pandemic did disrupt economic activity towards the end of the last quarter of 2019-20,notes the HT report. However, even earlier estimates had projected slower growth for the year than 2018-19. That India’s growth momentum slowed for three years without an external shock, raises doubts on the validity of claims of a cyclical slowdown, the report argues.

The Indian economy was likely facing a demand-driven, perhaps even structural slowdown before the pandemic, the report contends. The policy response most likely misjudged it for a cyclical supply-side problem, it says. RBI’s Monetary Policy Committee pointed to weak demand as a problem in its resolutions last year. The only policy tool, the report argues, available to the committee, interest rate cuts, can do little to boost demand.

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