Note ban didn’t slow GDP, says Arun Jaitley

The Asian Age.

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Jaitley pointed out that there are several factors which can contribute to GDP in a particular quarter.

Union finance minister Arun Jaitley along with the ministers of state for finance at a press conference in New Delhi. (Photo: PTI)

New Delhi: Union finance minister Arun Jaitley on Thursday said that the annual GDP growth rate of 7-8 per cent is “fairly reasonable” and demonetisation alone could not be blamed for the slow growth in January-March quarter.   

GDP had slowed down to lowest pace in three years at 7.1 per cent in 2016-17 pulled down by fall in growth to  6.1 percent in January-March period (immediate quarter after demonetisation), as per the data released by the Central Statistics Office (CSO) on Wednesday.

Mr Jaitley pointed out that there are several factors which can contribute to GDP in a particular quarter.

“There was some slowdown visible given the global and domestic situation even prior to demonetisation in the last year. There was impact of global factors. There could be some impact in one quarter or two quarters of one particular factor (like demonetisation),” the finance minister said.

“If you look at the growth of some sectors, the 9-10 per cent growth that was normally in services, especially in the financial sector, has come down. The ability of banks itself was in question. So these are cumulative factors which played,” said Mr Jaitley.

“I do believe that in the current global situation a 7-8 per cent growth, which is at the moment Indian normal, is fairly reasonable. It is fairly reasonable level of growth by our own standard and very good by global standard,” he said.  

Outlining achievements of the Modi government in the last three years, Mr Jaitley said it has restored the credibility of the economy. “We have shown decisiveness, even the ability to take difficult decisions,” he said.

Mr Jaitley said the government discretion on economic matters was put to an end to stop corruption and market mechanism was followed to bring in more transparency. He said India became largest recipient of FDI in  2015-16 and 2016-17 due to policy reforms taken by the government.

“At a time when private spending was weak, public spending along with FDI played an important role in maintain investment cycle.” He dismissed reports of jobless growth in the economy. “If your economy is growing, jobs would be created in formal and much more in informal sector,” he said.

He indicated that people daunt have authentic data of jobs growth in informal sector so they give rise such rumours. On farm loan waiver by states, Mr Jaitley said that states who want to do so will have to do it from their own resources.