Amid India's Gross Domestic Product (GDP) growth slowed to over six years at 5% in Q1FY20, former Union finance minister Yashwant Sinha has said contraction in demand and reluctance to invest have led to the current slowdown in the Indian economy. He said some corporates are sitting on a pile of cash, but are not making investments, thus affecting demand.
He also said figures, data and statistics put out in the country are not seen as reliable anymore and several international agencies like the IMF and the World Bank have raised questions over them. He added that corporate, PSU sectors have suffered in the last one year. The demand in the economy, which is the growth engine, has come crashing down.
Sinha further said cash is not an issue with corporates. Some corporates are not investing because they depend on bank loans for investment and banks have withdrawn some of their facilities. But, he said there are some corporate firms who are sitting on cash, but are not investing and the major reason behind this that is there is no demand.
