Amid Opposition protests and demands for a discussion on economic slowdown, the Narendra Modi government on Monday said India did not face a 5 per cent gross domestic product (GDP) slump. The country continues to be the fastest growing economy in the world, it said.
During the Question Hour in the Lok Sabha, opposition MPs asked questions on the economic slowdown and whether demonetisation and implementation of the goods and services tax (GST) contributed to the economy having taken a hit.
Minister of State for Finance Anurag Thakur said a number of steps were being taken to strengthen the economy that included merger of banks and tax concessions to industries.
According to the National Statistical Office (NSO), Thakur said, the GDP growth on average was 7.5 per cent in 2014-19, which is the highest amongst G-20 countries. He said the World Economic Outlook (WEO) of October 2019, projects a significant slowdown in world output and trade in 2019.
“India, despite recent deceleration of GDP growth, is still projected by WEO to grow at the fastest rate in 2019-20 among G-20 countries,” he said.
The minister said the government has been taking several measures to address moderate levels of fixed investment rate in the economy, plateauing of private consumption rate and a modest export performance, with a view to increasing the GDP growth.
“There is no 5 per cent slump. Where did you get the figure? Show us,” Thakur countered when Aam Aadmi Party MP Bhagwant Mann said the country is facing slump in the economy. “By 2025, India will be a $ 5 trillion economy,” the minister said.
Thakur said tax concessions have been given to industries, foreign direct investments and MSME sector. The minister said several banks have been merged with bigger banks and the ultimate aim is to keep four strong banks with solid footing and ensure increased economic activities. He said strong actions have been taken against black money and number of tax payers has doubled due to demonetisation and implementation of the GST.
He said introduction of Insolvency and Bankruptcy Code (IBC) in 2016 is a significant step towards cleaning and strengthening of the financial system of the country.
Implementation of Goods and Services Tax in 2017 stands out as the most important measure for improving ease of doing business in the country and Make-in-India programme is a major initiative towards increasing the indigenous capacity of the country to produce world class goods and services, he said.
"More recently government has cut corporate tax rate from 30 per cent to 22 per cent to boost investment activity in the country. In particular, the corporate tax rate has been cut to 15 per cent for new domestic manufacturing companies which is amongst the lowest in the world," he said.
Further, in the World Bank's Ease of Doing Business 2020 Report, India's ranking improved by 14 positions to 63 in 2019 from 77 in 2018 after GST was implemented in 2017, he said.