The Aryavarth Express
Agency(New Delhi): The Congress party has raised serious concerns about the health of the Indian economy, pointing to increasing household debt and a persistent economic downturn. Party MP Jairam Ramesh criticized Prime Minister Narendra Modi’s economic policies, stating they have led to stagnation and financial hardship for Indian families.
During a press conference, Ramesh referred to a recent analysis by a leading financial services firm, as reported by the Business Standard, which painted a bleak picture of the economic landscape. According to the report, household debt has soared to 40% of GDP by December 2023, with net financial savings plummeting to a 47-year low of 5% of GDP. This decline in savings has been attributed to stagnant income growth, which has suppressed private consumption and investment.
Ramesh pointed out that the increase in household debt is primarily due to unsecured personal loans, contrary to the finance ministry’s emphasis on home and vehicle loans. He noted that the proportion of housing in personal loans has dropped below 50% for the first time in five years. Additionally, there was a notable increase in gold loans in December, a sign that families are resorting to desperate measures to manage their finances.
The Congress MP also highlighted the broader economic implications of these trends, including reduced capital for business and government investment and increased reliance on unpredictable foreign capital. He criticized the government’s portrayal of the economic situation, arguing that the reality of struggling Indian households contradicts the official narrative.
These economic challenges are compounded by near-stagnant employment growth, declining real wages, and high inflation, which Ramesh says have all worsened under the current administration. He also cited increased demand for MGNREGA work as evidence of the ongoing rural distress.
The Congress party’s critique comes as India prepares for the seven-phase Lok Sabha elections starting on 19 April, with results expected on 4 June. The party positions its ‘Nyay Patra’ manifesto as a direct response to these economic failures, promising corrective measures if elected.