Could the single engine driving India crash? Yes, if you go by one of Modi's top guys
-The Economic Times
At a time when the shadow of a slowdown lengthens but the government steadfastly downplays any such concern, here comes a cracker of an observation from one of India's most celebrated economists who also happens to be a vital cog in Modi's policy team.
In an interview to NDTV, Rathin Roy, member of the Prime Minister's Economic Advisory Council (PMEAC) and Director of National Institute of Public Finance & Policy, said that India could be headed towards a structural crisis.
In view of the coming crisis, India could soon get ensnared in the middle-income trap, eventually becoming like Brazil or South Africa, the top economist warned.
"In the history of the world, countries have avoided the middle income trap, but no country — once caught in it — has ever been able to get out," he said.
The shadow of a slowdown
An ET Intelligence Group survey had found a few days ago that India's consumption story was seriously misfiring — with many sectors like auto, FMCG and air travel, among others, wallowing in multi-quarter lows.
Decreasing money supply, rising uncertainty, and a plunge in income growth in both rural and urban India were forcing people to cut down on spending, the study had discovered.
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