Institutions have become zombies

It was a day of critiques for the Modi dispensation. Nobel laureate Abhijit Banerjee, too, recently gave a sharp assessment of the Indian economy and rated the fall in consumption as "extremely serious," reports NDTV.

The 58-year-old was speaking at Brown University last week when he spoke about institutions turning into "zombies" and investment nosediving, NDTV adds.

He also blamed Centre's big-ticket economic decisions - demonetisation and implementation of Goods and Services Tax for what he called a "demand problem". "I talk to my business friends. And they say that it is impossible to invest, you don't know who is going to call you up and say that's not the right thing to do," Banerjee said on October 9 at Watson Institute, Brown University.

Banerjee does not have good things to say about the economy

He also remarked that no one wanted to stick out their neck and take decisions. "They say 'ok wait, we will check with the PMO'. PMO is busy, so nothing happens," said the renowned economist.

"Over a four year period, average consumption is going down, (which) hasn't happened in many many many many many years. And this is after being corrected for inflation,’’ he said.

"Investment has totally collapsed by a factor of 75 per cent. Exports are not growing. I think this is a crisis. We don't call it a crisis if we want, we can say it could be a crisis, but I think we are in a crisis."

He said institutions went from being hyperactive under the Congress-led UPA, to becoming zombies. ‘‘And zombies are the worst because now you are completely frozen in a sense... they are not doing anything particularly," he said.

Dr Banerjee also assessed the 2016 notes ban and the implementation of GST as factors in the slump.