'Unprecedented' situation in financial sector: NITI Aayog Vice Chairman

New Delhi: Vice Chairman of NITI Aayog Rajiv Kumar has termed the ongoing situation in financial sector as unprecedented and called for extraordinary steps to tackle it.

"This is an unprecedented situation for the government. In the last 70 years, we have not faced this sort of liquidity situation where the entire financial sector is in a churn, and nobody is trusting anybody else," Kumar said.

"Within the private sector, nobody wants to lend to anybody else. Everyone is sitting on cash," he said while speaking on Thursday at the Mindmine Summit 2019, the flagship event of the Hero Group.

Kumar said the government must do whatever it can to remove apprehensions of the private sector.

"The whole nature of the game has changed in the past four years after demonetisation, GST and IBC. In the earlier period, you had 10, 20, 30, 35 per cent of cash sloshing around which used to help people. That has become much less now," he said.

GDP growth is set to slow further in the April-June quarter of this year to 5.7 per cent amid contraction in consumption, weak investments and an under-performing service sector, says a Nomura report.

For the financial year ended March 31, Gross domestic product (GDP) grew 5.8 per cent in the January-March period, the economic growth stood at 6.8 per cent.