Taking on the criticism of government policies that are said to have impacted economic growth, Finance Minister Arun Jaitley on Thursday said that initially the government was criticised for taking “incremental reforms” and is now facing flak for “Big Bang” measures.
“Post demonetisation and especially after the Goods and Services Tax, the biggest criticism was that why did I do it so quickly,” he said at the launch of a book ‘India @70 Modi @3.5’, written by NITI Aayog member Bibek Debroy and Ashok Malik, Press Secretary to the President of India.
Jaitley’s comments come soon after senior BJP leader and former Finance Minister Yashwant Sinha and Congress leader and former Finance Minister P Chidambaram criticised the NDA policies that have led to first quarter GDP growth slowing to a three-year low of 5.7 per cent.
Referring to robust tax collection data, the Minister questioned criticism on the perceived slowdown in the economy. “The so called slowdown has now impacted the tax collections,” he said.
While direct tax collections have risen 15.7 per cent over last year, receipts from GST are on anticipated lines and are expected to increase further.
Jaitley said that with GST collections at over ₹90,000 crore in the first two months of its roll out and payments to States have been made. Noting that there have been teething troubles, he also promised easier compliance for small businesses under GST.
Dig at CongressTaking a dig at the Congress, Jaitley blamed them of policy paralysis and said it was keen to delay the roll out of GST.
Pointing out that India has been the fastest growing economy into the world, Jaitley said that every economy faces some difficulties.
Noting that demonetisation has had some impact on the economy in the short run, he said that it will have a positive effect in the medium and short term.
Another challenge has been some of the lagging private sector and promised that the government would take “decisive” measures to address it.
“The space of bringing a blend between a fast moving economy and making sure benefits percolate even to the poor has been the basic tenor of the government in the past three and a half years,” Jaitley stressed, listing out schemes like Saubhagya, Ujjwala and Jan Dhan.
The Minister said that the economic situation now is better than what was inherited from the UPA government.
While the fiscal and current account deficit are under control, foreign investments have been encouraged through opening up sectors and dismantling the FIPB.
On concerns over rising inflation, he said that some amount of inflation is good for the economy or else there would be recession.
While retail inflation is now at about 3.36 per cent, Jaitley said under the UPA it was at about 9 per cent to 10 per cent.