Skip to main content

DeMon, GST will benefit economy in long run: FM

By
DeMon, GST will benefit economy in long run: FM
Finance minister Arun Jaitley on Thursday told the Rajya Sabha that the structural economic reforms undertaken by the Modi government may entail some cost in the short term but would end up benefiting the economy in the medium and long term.Responding to concerns expressed by members during a short-duration discussion on the state of economy, particularly the impact of demonetisation and GST, Jaitley said that “after making such major structural changes it is natural to feel some impact for one, two or three quarters...there may be some criticism for 2-3 months but then benefits shall follow”.
“Structural reforms entail some cost...but then it bottoms out and the curve starts moving...such indications are now becoming visible,” he stated.Jaitley mentioned that India was the fastest-growing economy for last three years and even after the structural reforms, the IMF/World Bank foresaw its ranking as second highest. “This has restored our credibility...our economy has got an upgrade after 13-14 years...its ease-of-business rating is up from 142 to 100
After making such major structural changes it is natural to feel some impact for one, two or three quarters...there may be some criticism for 2-3 months but then benefits shall follow ARUN JAITLEY (FINANCE MINISTER)among 188 nations,” he said while recalling how the erstwhile UPA government had left the Indian economy among ‘fragile five’. “Obviously we have done something right,” he said, countering Congress MP Anand Sharma’s charge that the economy was “gasping” on account of rising unemployment, closing down of businesses and falling national investments.
In a bid to corner the government on demonetisation, Sharma, who opened the short-duration discussion, sought to know which all goals had been met by the measure. “99% of the money is back in the banks. Also corruption got a boost,” he alleged.Sharma and other opposition MPs including CPM’s D Raja, Trinamool’s S S Ray and SP’s Ram Gopal Yadav questioned the government’s “failure” to implement its assurance of creating two crore jobs each year.
Jaitley, on his part, re- minded Sharma how he was criticising a marginal slippage in fiscal deficit now when UPA tenure had seen 4.5% current account deficit and 6% fiscal deficit. “Our credibility was hit when after the Nineties, decision making and reform was paralysed...We gradually brought the fiscal deficit down and also in this time brought structural reform”.
“You conceived Aadhaar but we took it forward...After every budget, there was talk that subsidies must be targeted. We took this reform to its logical end...Also GST was a combined idea...but now that we have implemented, you state outside the House that rates should be cut but inside you complain that revenues are lower,” said Jaitley.On NPAs, Jaitley said it was not an ideal situation to fund the bailout with public money. “But since banks support economic growth, it is our duty to help them,” he said.
The The Economic Times, New Delhi, 04th March 2018

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

By
  New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...
Post a Comment
Read more