Infosys co-founder NR Narayana Murthy said on Thursday that the Indian economy is growing at 6-7 per cent this year and "investor confidence is at a historic high", news agency ANI reported. "India has become the software development centre of the world. Our foreign exchange reserves have crossed $400 billion," the IT czar said while speaking at an event in Gorakhpur. The comments from Mr Murthy come at a time when the economy is facing its worst slowdown in nearly five years, with some sectors staring at lakhs of job cuts.
Mr Murthy further said: "Our government have to become more citizen friendly and remove obstacles to entrepreneurs to create larger and larger number of jobs. Our economic policies have to be less populist and more based on expertise."
Infosys co-founder NR Narayana Murthy in Gorakhpur: Our economy is growing at 6 to 7 per cent this year. India has become the software development centre of the world. Our foreign exchange reserve has crossed 400 billion dollar. Investor confidence is at a historic high. (22.08) pic.twitter.com/jglAGxwRI4ANI UP (@ANINewsUP) August 23, 2019
India's GDP or gross domestic product grew 5.8 per cent in the January-March period. With that, India lost its position as the fastest-growing major economy of the world to China for the first time in one-and-a-half years.
For the full financial year 2018-19, which ended on March 31, India's GDP growth stood at 6.8 per cent - the lowest level recorded in nearly five years.
Passenger vehicles sales in the country plunged 30.98 per cent in July compared to the corresponding period a year ago, according to data from industry body SIAM or Society of Indian Automobile Manufacturers. That marked the worst decline recorded since December 2000, when the industry sold a fifth of the vehicles it sells currently.
According to Ram Venkataramani, president, Automotive Component Manufacturers Association of India (ACMA), the crisis in the auto industry is unprecedented. The 15-20 per cent cut in production by vehicle makers has led to a crisis like situation in the auto component sector.
"Most of the auto component makers are managing the downturn by reducing the number of working days and retraining the workers... If the trend continues, an estimated 10 lakh people could be laid-off," he has said.
While the government has said that growth could be "relatively slower" in the April-June quarter, many economists have lowered their projections for the financial year ending March 31, 2020.
Earlier this month, the Reserve Bank of India (RBI) lowered its GDP growth projection for 2019-20 to 6.9 per cent, from 7 per cent forecast in the June policy.
The central bank also underlined the need for addressing growth concerns by boosting aggregate demand. It has eased the key interest rates by 110 basis points (1.1 percentage point) so far this year.
Calls for a fiscal boost from the government for sectors like automobiles have been growing in the past few weeks.
Government intervention in the private sector creates a moral hazard, Chief Economic Adviser Krishnamurthy Subramanian said on Thursday.
"I think we expect the government to use taxpayers money to intervene every time there is a sunset phase," he said.