Minister Arun Jaitley said today that the impact of structural
reforms is "behind us" and the early economic indicators point to an
improvement. Structural reforms like demonetisation and the roll out of
the Goods and Services Tax would have had some consequences but they
will help the economy in the long run, he said.
"Having undertaken
two major structural changes which are extremely important for Indian
economy, I think the impact being substantially behind us, the early
indications for the future look to be positive. " he said at the India
Today Conclave here.
In the last 2-3 months the Purchasing
Managers’ Index (PMI) data has come out positive, similar to industrial
output and core sector growth, he said, adding that these are some of
the early indicators and "probably point to an improved situation".
Prime
Minister Narendra Modi had on November 8 last year announced the
demonetisation of old Rs 500 and Rs 1,000 notes to combat corruption,
black money, terrorism and fake currency.
On
the criticism that note ban has impacted growth, Jaitley said: "If you
don’t have the capacity or courage or broad shoulders to undertake those
structural reforms, then of course, that status quo would have
continued. "And the status quo ante that existed in India, I don’t think
that is an ideal situation where India would have lived to be."
Jaitley
said India was a fast moving global economy for three years in a row
and the time was opportune to undertake structural reforms. "Otherwise,
the only option to structural reform that my predecessor could give you
is policy paralysis, not my choice."
The economy slowed to 5.7
percent in the April-June quarter of the current fiscal, the weakest
pace since 2014 as demonetisation sucked out 86 percent of the currency
in circulation throwing cash-dependent businesses in disarray and the
implementation of GST from July 1 hit small and medium enterprises. The
GDP growth had started to slip in the quarters before demonetisation, he
said, adding that the manufacturing activity declined in the run-up to
the GST roll out from July 1 as businesses started destocking their
goods.
08 Nov 2017, 10:59 AM