Twitter Perplexed as Niti Chief Blames ‘Reforms’ for Slow Growth

Niti Aayog CEO Amitabh Kant said that reforms like GST, IBC, RERA have caused slowdown in growth.

On Saturday, 3 August, as Niti Aayog CEO Amitabh Kant attributed the slowdown of GDP growth to “too much of reforms”, experts and common people alike, on Twitter failed to wrap their heads around the proposition.

“One of the reasons for the slowdown is that it has had too much of reforms – GST , IBC, RERA – a huge set of reforms which we have undertaken and I think the next round of reforms must revolve around sectors like oil and gas, mining, coal,” a report by The Hindu, quoted Kant, as saying.

The policy think tank chief was speaking at a summit held in New Delhi.

Not long after, social media users expressed their dismay and confusion over how economic reforms could possibly hamper growth.

The only way it makes sense to me is if the “reforms” have raised the potential rate of growth, but the RBI didn’t see/believe it, and so the MPC kept nominal rates too high to prevent overheating. Not saying I agree, but it’s the only way I can understand a reform-led slowdown. https://t.co/mJyosdNC6n

— Andy Mukherjee (@andymukherjee70) August 3, 2019

Senior business journalist Latha Venkatesh also pointed out that Kant had not mentioned demonetisation as an economic reform.

Please note when Mr Kant refers to reforms he only mentions GST, IBC and RERA. Demonetisation has quietly been dropped. With tax collections declining, cash usage steady and no let up in terrorist activities, it’s becoming tough to claim DeMo was “reform”. https://t.co/PVqCBhLRb2

— Latha Venkatesh (@latha_venkatesh) August 3, 2019

Others pointed out the flaws and failure of the ‘reforms’ listed out by the Niti Aayog chief in his argument.

Amitabh Kant is being honest. He is admitting that there is an #EconomicSlowdown. It is because of reforms by the govt. Reforms like DeMonetisation, Gabbar Singh Tax etc. https://t.co/2v9TTYXFv7

— Ruchira Chaturvedi (@RuchiraC) August 3, 2019

@andymukherjee70

In some time Mr Kant will be forced to drop #RERA and #IBC from the list of reforms, these are failed acts as it has not solved any issue yet. News is full of 2 lac #CheatedHomeBuyers im NCR region alone. @amitabhk87

5 years gone, no solution from Govt.

— ranjeet jha (@ranjeetjha1974) August 4, 2019

Well, to be fair, in the short run IBC, RERA and to a lesser extent GST do dampen growth (since the first 2 do less to more prudent investment), but lead to higher pace of growth in the long term. But it is an insufficient explanation, plus they botched GDT design

— Akshay Alladi (@akshayalladi) August 3, 2019

A section of Twitter also pointed out that reforms are effected to provide impetus to the economy in the first place.

Is there any precedence elsewhere in the world more reforms have led to a slow down in the economy? This is a most ridiculous statement I have come across as a banker!!

— Arvind Datta (@datta_arvind) August 3, 2019

@amitabhk87 can you give specific examples globally where reforms slowed down the economy mentioning what reform and why ? Better elaborate how economy shall improve and since when instead rubbishly justifying the slow down

— AnupK Bagchi (@AnupBagchi) August 3, 2019