Top News of the day : Jaitley banks on GST to lift economy after humbling GDP figures

The Finance Minister, Arun Jaitley, on Thursday said that it would be erroneous to draw any analogy between demonetisation and GST implementation as regards their impact on economic growth.

“I see no adverse impact of GST on GDP. GST by itself should add to growth,” Jaitley told a press conference on three years achievements of finance ministry.

Jaitley’s remarks are significant as it came on the heels of the release of GDP data for Q4 of 2016-17 and entire 2016-17.

The GDP data showed that ‘demonetisation’ exercise had impacted economic growth, especially during the fourth quarter where GDP growth came in at lower-than-expected 6.1 per cent.

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However, Jaitley said that several factors are usually at play on GDP movements in a quarter and that the “cumulative” factors may have impacted GDP growth in the fourth quarter.

“There was some slowdown visible even prior to demonetisation in the last year. There was also impact of global factors. Even services, where we regularly see 9-10 per cent growth, had seen some slowdown,” Jaitley said.

The Finance Minister said that a growth rate of 7-8 per cent — now seen as Indian normal — in the current global situation is “very good by global standards” and “fairly reasonable even by our own standards of growth”.

Jaitley expressed confidence that all the new policies (such as GST, insolvency) rolled out by the Government would be beneficial for the country’s economic growth.

“As the impact of our policies hold out, it will be beneficial to the economy,” he said.

Source: http://www.thehindubusinessline.com/economy/resolving-npas-encouraging-private-sector-investment-major-challenges-before-govt-finance-minister-arun-jaitley/article9717497.ece