GDP growth of 7-8% reasonable given global conditions: Arun Jaitley

We have restored the credibility of the Indian economy: Arun Jaitley

Finance Minister Arun Jaitley on Thursday played down slow down concerns after India's economic growth fell to 6.1 per cent in the fourth quarter (Q4) of 2016-17 (FY17), primarily because of demonetisation adversely affecting economic activity. 
 

"We have restored the credibility of the Indian economy through decisiveness and tough policies," he said while addressing the press.

The Finance Minister said that in the last three years global trade shrank. He once again raked up the debate of big economies becoming protectionist.

"There were three distinct benefits from demonetisation. Firstly, there is greater movement towards digitisation, tax payers' base has increased and a message has gone loud and clear that it is no longer safe to deal in cash," the Minister said while addressing media on completion of three years of the Bharatiya Janata Party-led National Democratic Alliance.

He added that all these steps are towards 'Operation Clean Money'.

Here are the highlights of his speech:

— GDP growth of 7-8% is reasonable given global conditions

— Challenge of private sector investment linked to high bank NPAs

— Ready for July 1 GST roll out

I have seen multiple geopolitical uncertainties in the last three years, he said.

Jaitley added that India was not on global radar three years ago. "Government has taken tough steps to root out corruption," he said.

— There was some slowdown visible even prior to demonetisation
 

— Don’t see any adverse impact of goods and services tax on GDP growth

— Process to implement GST in its final stage, says Arun Jaitley
 

— Government has liberalised FDI regime, India has become largest recipient of FDI, says Finance Minister Arun Jaitley
 

— Reforms in subsidy have helped save resources, plug leakages, says finance minister
 

— Demonetisation created a new normal for economy, says Finance Minister Arun Jaitley
 

— Taxpayers base has increased post-demonetisation
 

— Resolution of banking non-performing assets a work-in-progress, a major challenge
 

— Setting up of Monetary Policy Committee, new bankruptcy code have been transformational changes

India's economic growth

The sectors worst affected were construction and financial services. 

Without indirect taxes, growth figures would be more dismal. Gross value added (GVA), the difference between gross domestic product (GDP) and net indirect taxes, grew by only 5.6 per cent in Q4 — the lowest in at least eight quarters, according to official figures released on Wednesday.

The effect of demonetisation was evident in the figures, with growth being pushed primarily by agriculture and government spending. In Q4, excluding agriculture and government spending, GVA grew a mere 3.8 per cent, down from 8.4 per cent in Q1.

In FY17, economic growth was at a three-year low of 7.1 per cent. The previous year, it was 8 per cent.