NEW DELHI: Ex-Finance Minister P. Chidambaram has said the government claiming it is living in denial about the internal factors responsible for the economic fall in the context of the latest Gross Domestic Product (GDP) numbers for the 2nd quarter of this financial year.
Taking to a series of tweets on Wednesday, Chidambaram noted that the GDP growth rate in the second quarter had slowed down from 13.5% to 6.3%. From the current trend, the figures for the third quarter could be lower, he said. “There are both external factors and internal factors that have pulled down the growth rate. The sad part is that the government is helpless against the external factors and in denial about the internal factors,” Chidambaram remarked.
Chidambaram said that the climate for investment was vitiated. “The appetite for investment is poor. The Incremental Captial Output Ratio has perhaps deteriorated. Given these factors, the chances of lifting the growth rate are low,” Chidambaram remarked.
The Captial Output Ratio data indicates the rate of investment and whether it leads to actual growth.