Former Union Minister Kapil Sibal on Monday said the economy is going through a "very difficult" phase as many sectors are in doldrums which were "not good" signs so far as the government's five trillion dollar economy target is concerned.
"Our economy is going through a very difficult phase. Our manufacturing sector is in the doldrums. In fact, just the other day there was a report saying that Maruti Suzuki has had a revenue dip of about 16 per cent. Tatas have a revenue dip," he said while participating in the debate over Insolvency and Bankruptcy Code (Amendment) Bill, 2019 in the Rajya Sabha.
The senior Congress leader said that the steel industry was faced with challenging times while the real estate sector was in very deep trouble and the FMCG sector was facing difficulties.
"These are not good signs for the economy, especially when you say that we are going to be a five trillion dollar economy by the time we reach 2024," he said.
Sibal also expressed concerns over the state of unemployment in the country and said the till the time government addresses the affairs of the economy, a lot of unemployment will be there in the country.
"Real estate, the retail sector, manufacturing sector, textile sector, and leather sector are among the main sectors that generate maximum employment in this country. And all of these sectors are in great difficulties today. Most of the resolutions that are taking place or insolvencies that are taking place are, in fact, in these sectors," he said.
He said the MSME sector was the backbone of the Indian economy and used to generate maximum employment.
"Only 94 petitions have been resolved thus far and there are 383 that have become insolvent. That means, out of every five petitions that are filed, one succeeds and four fail. In other words, four compes are going into liquidation. If four out of five compes go into liquidation, you can realise what impact it has on the employment sector," he said.
He said when small compes go into liquidation, all the people who are employed will be unemployed.
"So, you are, on the one hand, seeking to resolve these matters and, on the other hand, you are creating huge unemployment issues. There are, in all, about 14,000 applications that have been filed and most of them belong to these sectors and if they are all going to insolvency, the impact of this on employment will be mind-boggling."
"That is why they say that unemployment rate today is the highest in the last 48 years and you are going to have more and more unemployment as we move forward," said Sibal, while seeking a response from Finance Minister Nirmala Sitharaman, who introduced the Bill.
( With inputs from ANI )