After India’s economic growth slipped to 6.1% for the fourth quarter of FY17, Finance Minister Arun Jaitley, dismissing notion that it was on account of demonetisation, has said that several factors including the global situation were responsible for downtrend of gross domestic product (GDP) growth and said that slowdown in the fourth quarter was due to both domestic and global factors.
Finance minister pointed that some slowdown was visible even prior to demonetisation of Rs 500/1000 currency notes announced by the government on November 8 last year. He added that there are several factors which can contribute to GDP in a particular quarter. Finance Minister also said that Indian economy is growing at a fairly decent pace and 7-8% is fairly reasonable level of growth and very good by global standard and Indian standard. He further said ‘I see no reason that there would be adverse impact of goods and services tax (GST) on GDP. GST by itself should normally add to the growth.’
Referring to the challenges, Jaitley said the major ones include resolving the issue of bad loans in the banking sector and encouraging private sector investment. He admitted that resolving the issue of non-performing assets weighing down banks’ balance sheets is a major challenge for the government. Besides, India lost the tag of the fastest growing economy to China in the March quarter with a GDP growth of 6.1%, which pulled down the 2016-17 expansion to 7.1%.
