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New Delhi, June 1
Several factors including the global situation are responsible for decline in GDP growth to 6.1 per cent in the fourth quarter of 2016-17, Finance Minister Arun Jaitley said on Thursday, dismissing suggestions that it was on account of demonetisation.
“The last three years have been challenging for global economy and trade and the current growth of 7-8 per cent is fairly reasonable by Indian standards and good by global standards,” he said.The minister further said some slowdown was visible even prior to demonetisation of Rs 500/1000 currency notes announced by the government on November 8 last year.
According to GDP data released yesterday, growth rate slipped to 6.1 per cent in the January-March quarter and 7.1 per cent, the lowest in the three years, during 2016-17.
Referring to the challenges, he said the major ones include resolving the issue of bad loans in the banking sector and encouraging private sector investment.
“Developed countries showed signs of protectionism. Three years back, India was not on the global radar and credibility was low. We have restored the credibility of the economy,” he said.
“Decisiveness and reducing government discretion have been the hallmark of three years,” he said.
The minister said public spending and largest FDI inflow boosted the investment.
“Government followed transparent decision-making to reduce corruption and install market mechanism for allocation of resources.
“GST implementation is for improving the taxation system and the use of Aadhaar for taking welfare schemes to the people.
“Demonetisation created a new normal to clamp down on cash economy.
“Digitisation increases the tax base and a message is sent out that dealing in cash is no longer safe.
“Resolution of bank NPA is a major challenge and so is increasing private sector investment.
“Revenue of the government has increased gradually in three years.
“The OROP issue has been resolved,” he said. The Finance Minister said several factors contributed to GDP slowdown.
“Slowdown was visible earlier coupled with global sluggishness and demonetisation contributed to the slowdown.”
The GST would add to the growth, he said.
“Seven to eight per cent growth in current situation is reasonable.”
He said the RBI could not give approximations on the notes returned under demonetisation.
“Total amount of disclosure under tax amnesty schemes to be taken up cumulatively in all three schemes.
“The Income Tax Department is seeking details of disproportionate cash deposits.
“Action under benami transactions also will be taken to clean the economy.
“FDI in defence is an enabler and will not automatically lead to investment as government is the only buyer. Armed forces are dominating line of control.
“Government has taken steps to ease the situation with Pakistan. Environment for talks being successfully prevented by Pakistan,” he said.
“Army is dominating the insurgency in Jammu and Kashmir. The government is clear on GST deadline and industry will fall in line which thinks it is falling behind.
“The entertainment tax confusion is being spread.
“Is the farmers market meant for slaughter trade or not is the only clarification. It has nothing to do with state laws,” he said.
On privatisation of ailing national carrier Air India, Jaitley said Niti Aayog has already given its recommendations to the Civil Aviation Ministry to explore various options.
“It is for the Civil Aviation Ministry to explore various options,” he added.
