Friday, January 05, 2018

Arun Jaitley's sober assessment of the economy

In reply to a short duration discussion on the state of the economy in the Rajya Sabha on Thrusday, Finance Minister Arun Jaitley avoided political barbs and admitted that the economy faced challenges, indirectly conceded that implementation of GST has led to fall in revenues. He said after the shortfalls in the short-term, there would be long-term gains. He pointed out that the NPAs built up because of reckless lending by the public sector banks and lack of risk management. He said that the government was bound to save the banks from the burden of NPAs through recapitalisation, and it could not allow the banks to sink under the NPA burden because the money of the public was involved.
He pointed out the sanguine growth rates that India clocked between 2003 and 2011 was because of healthy growth in the world economy, and that when the world economic growth fell in the last part of UPa2's tenure, then it too faced problems on the growth front. He said that in the last three years, India had experienced two years of drought and that the world economy was in doldrums. He said that it is against this background of low growth in the world economy, that India's seven per cent growth stands out.
He said that under Prime Minister Narendra Modi India's credibility was restored and it was an important factor for the stable growth prospects in the near future. He said that the GST process began in Vajpayee's time, and it continued in the UPA tenure, and it was taken to its implementation phase by the NDA. He tried to emphasise the continuity in policy. He said that the government was continuing with the Aadhaar which was started by the UPA. He said that when Nandan Nilekani, the Unique Identity Authority of India, made a presentation to Prime Ministe Modi, he was convinced of its advantages, and he had asked the ministries to implement it and he also wanted it to be given statutory support. He said this government also continued with the Food Security Act, which was passed by the previous government.
He said that subsidies were being targeted so that the people who need them get it, and assured that there was no reduction in the money spent on the social welfare schemes.

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