Harish Rao warns of economic crisis as Telangana records deflation again
Former Finance Minister T Harish Rao has warned of an economic red alert as Telangana records deflation for the second month in a row. He blamed reduced government spending, failed promises and policy errors for the State’s economic slowdown
Hyderabad: With Telangana recording deflation for the second consecutive month, former Minister and senior BRS MLA T Harish Rao has signalled an economic red alert over the State’s economic health, cautioning that the current condition is a dangerous sign of an economy in reverse gear.
The Reserve Bank of India aims to keep inflation between two per cent and six per cent to ensure healthy growth, but Telangana is now below zero per cent. Urban inflation stood at -0.93 per cent in June and -0.44 per cent in July, while rural inflation in Telangana fell further to -1.54 per cent in July from -0.91 per cent in June.
“This is not an achievement, but an economic red alert,” Harish Rao said, recalling economist John Maynard Keynes’s warning that deflation triggers a downward spiral of falling prices, hurting businesses, killing jobs and destroying investment.
In a statement, the former Finance Minister blamed the crisis on decreased government spending on welfare and capital projects, broken welfare promises and policy blunders that have crippled agriculture, real estate and small businesses. He listed the unfulfilled commitments of Rs 4,000 Asara pensions, Rs 2,500 Mahalaxmi scheme for women, Rs 15,000 for farmers, Rs 12,000 for farm labourers, Rs 5 lakh Vidya Bharosa cards and Rs 12 lakh Dalit Bandhu assistance.
“Fulfilling these promises would have pumped money into the economy and boosted demand,” he argued, adding that the first step to fighting deflation was to make money available in people’s hands.
Harish Rao stated that capital investment has been steadily declining, starving infrastructure and industry of growth fuel. He said that projects like the Musi Riverfront Development and HYDRAA had crushed the real estate sector and wiped out thousands of potential jobs.
“Revanth Reddy has pushed Telangana’s economy into a free fall. Two months of deflation is not just a statistic, but a verdict on failed governance. Telangana is falling, not rising,” he said.
Urging Chief Minister A Revanth Reddy to wake up from vendetta politics and take care of the people by putting money into their hands immediately, he suggested investing in major projects to prevent deflation from deepening into recession.
