Strongly defending his government’s handling of the economy, Prime Minister Narendra Modi on Wednesday said that a “handful of people” were trying to spread a wave of pessimism and despair based on the slowdown experienced during just a quarter.
The government, he said, was committed to reversing the setback to growth in the April-June quarter and that structural reforms undertaken during the last three years, including demonetisation, Goods and Services Tax, and the Insolvency and Bankruptcy Code, would help the country step up into the next league.
Addressing concerns over implementation of GST, he said that he had asked the GST Council to identify bottlenecks faced by small and medium enterprises. The government, he said, is ready to make amends to help small traders.
Asserting that the fundamentals of the Indian economy are strong and that the reform process will continue keeping financial stability in mind, Modi said the dip in economic growth in one quarter was just a temporary blip. And that a rebound was expected in the upcoming quarters.
Modi, who was addressing Company Secretaries from all over the country, said that the GDP growth had dipped to 5.7 per cent or below eight times during UPA regime when the nation was faced with high inflation, current account deficit (CAD) and fiscal deficit.
“There were quarters when growth was 0.2 per cent, 1.5 per cent,” Modi said. That decline, he said, was more dangerous for the economy, because in those years India was battling “higher inflation, higher CAD and higher fiscal deficit”.
He said that inflation was more than GDP growth during previous regime when high price rise, fiscal deficit and CAD made headlines. Under the NDA government, he said double-digit inflation had come down to less than 3 per cent, the CAD was brought down to 2.5 per cent and the fiscal deficit reduced to 3.5 per cent.
The Prime Minister said that the government has brought in 87 big and small reforms across 21 sectors, making a comparison of the performance of key sectors with that during Congress rule.
Slamming his critics, he said: “There are some people who sleep well only after they spread a feeling of pessimism. We need to recognise such people.”
The PM’s remarks come days after former Union Finance Minister Yashwant Sinha had said that demonetisation and the GST rollout were poorly timed and had hit the economy hard. He had said that the economy was in such a mess that a revival before the 2019 elections was very unlikely.
The RBI, in its policy review on Wednesday, cut its end-March projection for growth based on gross value added (GVA) to 6.7 per cent from its previous forecast of 7.3 per cent.
The Prime Minister said there was a time when India was part of ‘fragile-5’ and the BJP government pulled it out to make it the fastest growing economy for most part of its three-year rule. Calling November 8 last year, the day he announced demonetisation, as a historic milestone in the country’s fight against corruption, Modi said that the registration of 2.1 lakh of 3 lakh suspected shell companies was cancelled as part of a sustained and ongoing crackdown on black money. A message has gone out, he said, that honesty will now be celebrated and rewarded.
