Jeff Bezos snubbed: IMF's Gita Gopinath says India needs investment
What's the story
At a time when India is witnessing a historic economic slump, the government should welcome investments, said chief economist of International Monetary Fund (IMF), Gita Gopinath, on Monday. Her comments came after Union Commerce Minister Piyush Goyal downplayed Amazon chief Jeff Bezos's announcement of investing $1 billion in India for digitizing small businesses. He also promised to create 10 lakh jobs by 2025.
Context
Bezos visited India bearing gifts, returned without meeting top officials
The world's richest man came for a brief three-day visit to India but was welcomed with protests by traders (who claimed Amazon's heavy discounts was hurting them), and a government-initiated probe into allegations that the e-commerce giant favored some brands over others. Nevertheless, Bezos spoke about India's bright future and his love for the country. Three days later, he returned without meeting government officials.
Reaction
While Bezos was in India, Goyal slammed his investment plans
Not only did BJP-led Centre not arrange a meeting of Bezos with ministers, but it also didn't say great things about his investment plans. Goyal claimed Bezos wasn't doing "India a favor". "They may have put in billion dollars. But then if they make a loss of a billion dollars every year, then they jolly well have to finance that billion dollars," he said.
Statement
India may have hurt market sentiment by ignoring Bezos
The treatment given to Bezos brought nothing but bad news for India. When Gopinath was asked if this hurt market sentiments, she replied in affirmative. "India needs a lot of investment. It's important to encourage investment more broadly with the mandate of the country. We need to revive domestic investment in India, consumption spending is weak," the 48-year-old told NDTV.
Prediction
IMF also lowered India's growth projection
On Monday, the IMF also cut the estimated growth of India to 4.8% for the financial year 2019-20. "The growth markdown largely reflects a downward revision to India's projection, where domestic demand has slowed more sharply than expected amid stress in the non-bank financial sector and a decline in credit growth," IMF said, in its World Economic Outlook (WEO).
Quote
Slump in Indian economy is affecting globe too
"Given the size of the Indian economy in the global GDP right now, if you have a significant downward revision for India, then it does have an impact on global growth so we revised global growth down for 2019 by 0.1%," Gopinath explained.
Details
After IMF and Gopinath's remarks, they'll be attacked, predicted Chidambaram
Gopinath's statements and IMF's conclusions about the Indian economy should serve as an alarm bell for the current regime and force them to take concrete steps. But former Finance Minister P Chidambaram feels the government might not take the red flags seriously and will attack Gopinath and IMF instead. "Even the 4.8% is after some window dressing," the Congress leader said in a tweet.
Twitter Post
You can read his tweets here
IMF Chief Economist Gita Gopinath was one of the first to denounce demonetisation.
— P. Chidambaram (@PChidambaram_IN) January 21, 2020
I suppose we must prepare ourselves for an attack by government ministers on the IMF and Dr Gita Gopinath.