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