Crisis in financial sector “unprecedented in 70 years”: NITI Aayog VC

Commenting on the ongoing stress in the financial sector, NITI Aayog Vice-Chairman Rajiv Kumar has termed it as “unprecedented in the last 70 years,” adding that the government must do whatever it can to take away some of the apprehensions of the private sector.

“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,” Rajiv Kumar said at a summit on Thursday.

“Within the private sector, nobody wants to lend to anybody else. Everyone is sitting on cash,” he added.

Kumar also suggested that the government may have to take steps which are out of the ordinary.

Listen to his comment here:

#WATCH: Rajiv Kumar,VC Niti Aayog says,"If Govt recognizes problem is in the financial sector… this is unprecedented situation for Govt from last 70 yrs have not faced this sort of liquidity situation where entire financial sector is in churn &nobody is trusting anybody else." pic.twitter.com/Ih38NGkYno

— ANI (@ANI) August 23, 2019

On the same day, a member of the Prime Minister’s Economic Advisory Council, Shamika Ravi, warned that the country was facing a structural slowdown.

Also read: India’s economic growth likely to slow down to 5.7% in Q1: Report

“We are faced with a structural slowdown. Urgently need to follow a #NationalGrowthStrategy with time-bound goals for many ministries. Need major reforms, not mere tinkering. Leaving economy to the finance ministry is like leaving the growth of a firm to its accounts department,” Ravi tweeted in response to a user’s question.

We are faced with a structural slowdown. Urgently need to follow a #NationalGrowthStrategy with time bound goals for many ministries. Need major reforms, not mere tinkering. Leaving economy to the finance ministry is like leaving the growth of a firm to its accounts department. https://t.co/1S2AcgBLr8

— Shamika Ravi (@ShamikaRavi) August 22, 2019

Former Reserve Bank of India (RBI) Governor Raghuram Rajan on Monday called the slowdown in the economy “very worrisome.”

India witnessed a major fall in its economic growth after it slipped to 5.8 per cent in the January-March quarter. Also, due to liquidity crunch, low private investments and core sectors’ under-performance, economic growth forecast has been revised below 7 per cent.