It’s important to encourage more investment broadly with the mandate of India. We need to revive domestic investment in India, consumption spending is poor
New Delhi: India needs a lot of investment and it is significant to encourage it, Gita Gopinath, Chief Economist of the International Monetary Fund (IMF) said to media on Monday, in reference to the government’s cold-shoulder to Amazon CEO Jeff Bezos during his visit last week.
Jeff Bezos visited India for three days that featured no meeting with any minister or government official. He promised to invest $1 billion in India. Union Commerce Minister Piyush Goyal scoffed at the announcement, saying Bezos had done “no great favors” with the investment. “They may have put in a billion dollars. But then if Amazon makes a loss of a billion dollars every year, then they jolly well have to finance that billion dollars. So it’s not as if Amazon is doing a great favor to India when they invest a billion dollars,” Goyal said while Jeff Bezos was in India.
When question whether Piyush Goyal’s statement on Bezos had hurt market sentiment, Gopinath said: ”Our country needs a lot of investment. It’s important to encourage more investment broadly with the mandate of India. We need to revive domestic investment in India, consumption spending is poor. So I think the environment has to be created for greater investment because that’s what will raise the capital stock and raise the country’s potential growth.”
On Monday the IMF slashed India’s growth forecast to 4.8 percent, a cut of 1.3 percent in just three months, and said India’s sharp slowdown was also a drag on the world economy.
”Given the size of the Indian economy in the global GDP right now, if you have an important downward revision for the nation, then it does have an impact on global growth so we revised global growth down for 2019 by 0.1% and the vast majority of that comes from the downgrade for India,” Gopinath said.
The insult to the Amazon boss was linked by many to criticism of Prime Minister Narendra Modi and the government in Washington post owned by Jeff Bezos.
Congress leader and former Finance Minister P Chidambaram, in series of tweets, stated that Gita Gopinath was one of the first to criticize demonetization and would now face attacks because of her comment on the Indian economy. “I suppose we must prepare ourselves for an attack by central government ministers on the IMF and Gita Gopinath,” he tweeted.
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