Govt. in denial of internal factors affecting economy: Chidambaram

Former Finance Minister P. Chidambaram. File
| Photo Credit: Karunakaran M.

Former Finance Minister P. Chidambaram has panned the government claiming it is living in denial about the internal factors responsible for the economic downslide in the context of the latest Gross Domestic Product (GDP) numbers for the second quarter of this financial year.

In a series of tweets on Wednesday, he noted that the GDP growth rate in second quarter had come 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 pity is that the government is helpless against the external factors and in denial about the internal factors,” Mr. Chidambaram said.

He said that the climate for investment was vitiated. “The appetite for investment is poor. The Incremental Captial Output Ratio (ICOR) has perhaps deteriorated. Given these factors, the chances of lifting the growth rate are low,” Mr. Chidambaram explained.

The ICOR data indicates the rate of investment and whether it leads to actual growth.