Economy

Arun Jaitley Downplays Demonetisation Impact on Economic Growth

Finance and defence minister Arun Jaitley attends a two-day meeting of the Goods and Services Tax (GST) Council, comprising federal and state finance ministers, in Srinagar May 18, 2017. Credit: Reuters/Danish Ismail

New Delhi: Finance minister Arun Jaitley on Thursday played down the impact on economic growth of the government’s decision last November to scrap most of the cash in circulation, saying the annual rate of growth was “very reasonable”.

Jaitley spoke after data on Wednesday showed that India’s economy, Asia’s third largest, suffered a growth slowdown in the quarter to March, to 6.1%, well below the expectations of independent economists.

He focused, however, on the growth figure of 7.1% in the 2016/17 fiscal year to March.

“I do believe that in the current global situation, a 7-8% growth, which at the moment is the Indian normal, is very reasonable,” he told a news conference.

Looking ahead to the planned launch of a new goods and services tax (GST) from July 1, Jaitley said the government was “in a state of preparedness” for the rollout. He said that the GST would add to the rate of economic growth.

Jaitley also told reporters that resolving the issue of non-performing assets weighing down banks’ balance sheets was a work in progress and a major challenge.