Facing criticism over the state of economy, Prime Minister Narendra Modi on Wednesday lashed out at the detractor of his Government’s economic policies and said the structural reform will continue while steps will be taken to reverse the GDP slowdown.
Modi defended demonetisation and GST and said Indian economy is on firm footing and he will never jeopardise the country’s future for the present gains.
The PM quoted high consumption figure in several areas of economy, especially growing auto sale figures, impressive inflow of FDI, and rising air traffic, to emphasise that consumption has not slowed down and the economy was moving in the right direction.
“I will not jeopardise the future of the country for my present gains,” said the PM, adding the Government would focus on structural reforms rather than giving doles to win praises.
In an hour-long speech to Company Secretaries, Modi said his critics are seeing slowdown in the last two quarters but were ignoring that the BJP Government had brought down inflation from 10 per cent in the UPA regime to 2.5 per cent, shrunk Current Account Deficit to near 1 per cent from 4 per cent, and brought down fiscal deficit to 3.5 per cent from 4.5 per cent.
Drawing comparison with the UPA regime, the PM said GDP growth was 5.7 per cent or less than that on eight occasions during previous UPA Government and took a jibe at the “pessimists” for calling the April-June growth of 5.7 per cent as “doomsday.”
The PM was obviously answering to points raised by senior BJP leader and former Finance Minister Yashwant Sinha in a hard-hitting article headlined “I need to speak up now”, describing the economy as a “mess” that will not resuscitate before the next general elections.
“The Government is committed to reverse this trend...We are capable of that and ready to take decisions,” said Modi, adding the decisions taken by the Government will take India to a new growth trajectory.
The PM reminded his critics that of a time when India was part of ‘fragile-5’ economy growth and the BJP Government pulled it out to make it the fastest growing economy for most part of its three-year rule.
Speaking at length on demonetisation, the PM said, “ November 8 will be known in history as the first day of the war against corruption. It was this Government that had the courage to take the demonetisation decision.”
He pointed out that after demonetisation cash to GDP ratio has become 9 per cent, down from 12 per cent before November 8, 2016. “
Addressing concerns over implementation of the Goods and Services Tax (GST) regime, the PM said he has asked the GST Council to identify bottlenecks and technological
hurdles faced by businesses especially small and medium enterprises.
The Government, he said, is ready to make amends to help small traders. Modi said registration of 2.1 lakh out of 3 lakh suspected shell companies identified post note-ban has been cancelled in a crack down on the black money.
On FDI, Modi listed out the extent of foreign direct investment in the three years since his Government took over. “liberalisation began in 1992. But see what’s happened 2014-2017. Seventy-five per cent of FDI into construction came in those 3 years.
“Fifty-six per cent FDI came in mining sector, 53 per cent of total FDI came into computer software and hardware, and 49 per cent of FDI into renewable energy,” said the PM, adding, “ Rising FDI inflows are proof that foreign investors trust the Indian economy, have faith in government’s policies and most of all, our intent.”
Rejecting the arguments that the demonetisation and GST have broken the backbone of the economy, the PM said, “Since June, commercial vehicle sales up 23 per cent and passenger vehicles up 12 per cent, two-wheeler sales up over 14 per cent. What would you say to thatIJ”
He went on to add that domestic air traffic up 14 per cent in last two months, Air freight volumes up 16 per cent, telephone subscribers up by over 14 per cent.
“These indicators show an uptick in urban demand and in rural sector. This happens when people are confident,” he said.
The PM said, “ “Some people enjoy spreading pessimism, they sleep well at night after that. For those people, a dip in growth for one quarter becomes doom. Is it the first time growth fell to 5.7 per cent.”
“There were six occasions under the previous Government when the growth rate fell to 5.7 per cent or lower,” said the PM, adding, “There have been quarters when India’s growth rate was 0.2 per cent or 1 per cent. That was even more dangerous as it came with higher inflation and deficits.”
In an apparent reference to Sinha, who said the real GDP growth was much lower than 5.7 per cent, the PM said, . “When CSO showed 7.4 per cent growth, the same people questioned it and said it doesn’t feel like that in ‘ground reality’. Over the last 2 quarters, when growth fell to 6.1 per cent and 5.7 per cent, these people started loving the data.”