New Delhi, August 23: Government think tank Niti Aayog on Thursday said that government needs to take extra steps to deal with the unprecedented stress in the financial sector that has resulted in an economic slowdown in the country. Rajiv Kumar, VC Niti Aayog said, "If the government recognises the problem is in the financial sector, this is an unprecedented situation. From the last 70 years, we have not faced this sort of liquidity crunch, where the entire financial situation is in churn and nobody is trusting anybody else."
Kumar further highlighted that the government needs to take measures that eliminate apprehension from the minds of private sector players and encourage them to step up investments. Indian Economic Crisis: From Parle to Maruti, Iconic Indian Companies Hit By Slowdown And Dwindling Sales Stare at Job Cuts.
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#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
Talking about how stress in the financial sector has led to a slowdown in the economy, Kumar said the entire episode started with indiscriminate lending during 2009-14 leading rise in non-performing assets (NPAs) post-2014. Rising NPAs reduced the ability of banks to do fresh lending.
Due to a major slump in demand, a slowdown has hit several industries, which is leading to massive job cuts in India. From biscuits to cars, Indian companies across industries are desperately fighting the weak economic situation in the country.
(With inputs from agencies)