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Economy on right track: PM Modi

Modi slams UPA, says it's not first time growth has fallen to 5.7% in a quarter

Indivjal Dhasmana  |  New Delhi 

Narendra Modi on economy
PM Narendra Modi

Prime Minister on Wednesday lambasted the critics of his government’s and expressed commitment to carrying out further reforms to reverse the trend of declining (gross domestic product) growth.

Modi compared the “achievements” of the three years of the National Democratic Alliance (NDA) government led by him against the “failures” of the previous United Progressive Alliance (UPA) regime, arguing this was not the first time that the economic growth had fallen to 5.7 per cent in a quarter. The regime’s record was much worse, he added. 

He said the current government had made a paradigm shift from policy paralysis of the previous government to policy implementation.

Modi assured the companies coming into the formal economy, that they would not be hounded and their old records would not be examined. He said demonetisation had led to a reduction in the cash-ratio to 9 per cent now, compared with over 12 per cent before November 8, 2016.

Amid concerns raised by many over hassles under the goods and services tax (GST) regime, the Prime Minister said the new tax system had added 1.9 million new taxpayers. Two days before the Council meeting on Friday, he assured that changes would  be made in the new system as and when the need arose.

PM scores economic points
On job creation, he said the reforms undertaken by his government were playing a big role in employment generation. “This is true that after recording 7.5 per cent growth on an average in the previous three years, economic expansion declined to 5.7 per cent during the April-June quarter of the current financial year. But, this is also true that this government is committed to reversing this trend,”Modi said, speaking at the 50th anniversary of the Institute of Company Secretaries of India (ICSI) here. 
Compared to this, the last two years of the government witnessed 6 per cent growth, he said, adding that he was taking only the last two years of the Manmohan Singh government to compare growth numbers under the revised methodology.

The growth declined to 5.7 per cent or less eight times during the Manmohan Singh rule, he said. 

Those years were not good for the economy as low growth was associated with high inflation, fiscal deficit, and current account deficit, he said.

Modi said India’s economy had seen quarters that clocked only 1.2 per cent or 0.2 per cent economic growth.

Modi took on the economists who have pointed fingers at the methodology to calculate when the growth rate was high, saying when the economic expansion fell to 6.1 per cent and 5.7 per cent in the past two quarters, these very same economists started lauding correctness of numbers.

He rolled out the statistics of auto sales, tractor sales, two-wheeler sales, rise in domestic air traffic, telecom subscribers, sale of FMCGs, PMI numbers, natural gas production, disbursal in personal loans, advances by housing finance companies, non-banking finance companies, capital market numbers to buttress his point that demand had revived in the economy.

He said the government had taken many important decisions aimed at economic reforms and this process would continue. “We will continue to take necessary steps to promote economic development and foreign direct investment. We will also maintain financial stability.”

In the past three years, he said, the government had carried out 87 small and big reforms relating to 21 sectors. “We have initiated changes in defence, construction, financial services, food processing among these sectors.”

Modi's economic report card

First Published: Thu, October 05 2017. 03:11 IST