GDP growth of 7-8 pc 'fairly reasonable', says Jaitley

India growing at 7-8 per cent is "fairly reasonable" in the current global context, Finance Minister Arun Jaitley today said while maintaining that the decline in fourth quarter GDP print cannot be attributed to demonetisation alone.
India lost the tag of the fastest growing economy to China in the March quarter with a GDP growth of 6.1 per cent, which pulled down the 2016-17 expansion to 7.1 per cent.
Jaitley said the slowdown in the fourth quarter was due to both domestic and global factors.
"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," Jaitley said while addressing media on completion of three years of the Modi government.

"There was impact of global factors. There could be some impact in one quarter or two quarters of one particular factor (demonetisation)...
"...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," he said.

He added that a GDP growth rate of 7-8 per cent is reasonable by both global and Indian standards.
"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. I see no reason that there would be adverse impact of GST on GDP. The GST by itself should normally add to the growth," he said.
The government intends to roll out the Goods and Services Tax (GST) from July 1.
On the issue of total deposits received during demonetisation, the finance minister said the Reserve Bank is compiling data and will give the figure once the exercise is complete.
"The RBI as an important institution can't give approximations. Today every currency note has to be counted, if there is any counterfeit that has to be eliminated and real count has to come. It's an enormous exercise that RBI is doing. As soon as they complete it, they will give the accurate figure," he said.

With regard to shifting the financial year to January, Jaitley said the government has not decided on it yet.
He also said the Centre will not provide any additional funds to states for undertaking farm loan waivers other than what has been recommended by the 14th Finance Commission.
"They (states) have to do it from their own resources," he clarified.
On privatisation of ailing national carrier Air India, he 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.
Oil companies merger issue is also being looked at by the concerned ministry, he added.

Jaitley further said that after the NDA government came to power in May 2014, it has been able to restore the credibility of the Indian economy and the government which was at its lowest ebb due to serious charges of corruption and indecisiveness during the earlier UPA regime.
The government's major achievements in the last three years include taking difficult decisions, drastic changes in the governance system and eliminating the government discretions in the process of decision making and overall governance, he said.
He said that another major contribution of the present government has been creating an atmosphere for the growth of the economy at large so that it is ensured that the benefits of the growth accrue to the poor and underprivileged section of society in particular.

He further said the government created a federal institution (GST Council) based on federal taxation i.E. Goods and Services Tax (GST) which is now at the last stage of finalisation.
This will be a historical indirect tax reform which will bring transparency, simplicity and efficiency in the tax administration, he said.
The government also implemented JAM (Jandhan, Aadhar Mobile) Trinity based financial inclusion system under which a law relating to Aadhar was enacted so that resources are optimally utilised by plugging the leakages.
Highlighting demonetisation benefits, Jaitley said firstly, it led to greater movement towards digitisation of transactions and secondly, the move helped in widening the taxpayers base and thirdly, it sent a strong message that it is no longer safe to deal in cash.

The finance minister said that demonetisation has established a 'new normal'.
Talking about other achievements in the financial sector, he said Operation Clean Money, constitution of Monetary Policy Committee (MPC) and enactment of Insolvency and Bankruptcy Code, among others, are steps in that direction.