Unprecedented situation for govt in 70 years, says NITI Aayog VC on liquidity crisis

Unprecedented situation for govt in 70 years, says NITI Aayog VC on liquidity crisis

Agency News

Vice Chairman of NITI Aayog, a Government body set up by NDA to transform India, Rajiv Kumar kicked up a row by criticising the economic condition of India, terming the ongoing stress in financial sector as "unprecedented in the last 70 years". Rajiv Kumar’s statement came up close on the heels of similar revelations of economic slowdown and job cuts by various corporate honchos including the automobile manufacturing companies such as Maruti and Tata Motors. Rajiv Kumar also called for for extraordinary steps to tackle the economic slowdown. Rajiv Kumar’s revelation came while addressing the Hero Mindmine summit on Thursday.

Citing the situation of liquidity crisis in the financial sector and weak private investments, he said the government needs to take "out of the ordinary" steps to revive growth. Rajiv Kumar’s statement has soon turned into a row as he belongs to NITI Aayog which is very much a government body. NITI Aayog was established in 2015, by the NDA government, to replace the Planning Commission in which the Prime Minister is the Ex-officio chairman. Continuing his criticisms, Kumar said that there is no trust in the market, as financial institutions are only indulging in selected lending while denying credit to a large pool of business across sectors.

"This is an unprecedented situation for the government. In the last 70 years, we have not faced this sort of liquidity situation where the entire financial sector is in a churn, and nobody is trusting anybody else," News Agency ANI quoted Rajiv Kumar as saying. Rajiv Kumar also said the entire economic situation had changed after implementation of initiatives like demonetisation, Goods and Service Tax and Insolvency and Bankruptcy Code. As damage control exercise, Finance Minister Nirmala Sitharaman has to conduct a press conference on Friday in which she offered that the glitches in the Goods and Service Tax (GST) would be solved.