RBI has confirmed what I've been warning for months, says Rahul Gandhi

Congress leader Rahul Gandhi on Wednesday (August 26) attacked the government over the state of the economy and said it needs to give money to the poor to restart the economy through consumption.

His attack on the government came after the Reserve Bank of India (RBI) said on Tuesday that demand in the economy will take quite some time to mend and that an assessment of aggregate demand during the year so far suggests that the shock to consumption is severe.

“RBI has now confirmed what I have been warning for months. Govt needs to: spend more, not lend more,” Gandhi said.

“Give money to the poor, not tax cuts to industrialists. Restart economy by consumption,” the former Congress chief tweeted.

RBI has now confirmed what I have been warning for months.

Govt needs to:
Spend more, not lend more.
Give money to the poor, not tax cuts to industrialists.
Restart economy by consumption.

Distractions through media won't help the poor or make the economic disaster disappear. pic.twitter.com/OTDHPNvnbx

— Rahul Gandhi (@RahulGandhi) August 26, 2020

Gandhi also said “distractions” through media will not help the poor or make the “economic disaster disappear”.

In its latest annual report, the RBI said “deep-seats and wide-ranging” reforms are needed to regain losses and return to the path of sustainable economic growth.

The RBI on Tuesday (August 25) had also warned of economic contraction till September. “More protracted spread of the coronavirus pandemic, deviations of the monsoon from the predicted normal rains and global financial market volatility are key downside risks to growth,” the bank said in its annual statement, according to NDTV.

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“The pandemic has affected over 200 countries, bringing economic activity to a standstill,” NDTV quoted the RBI as saying.

The central bank further said the COVID-19 pandemic affected the supply of notes. “The supply of banknotes during 2019-20 was also lower by 23.3 per cent than in the previous year mainly due to the disruptions caused by the outbreak of COVID-19 and the ensuing lockdown,” the report said.

The central bank’s annual report came days before of the release of official data on GDP for the quarter ended June 30.