‘You’ll Always Have Critics and Cynics’: Jaitley Responds to Raghuram Rajan’s Criticism of GST
GST had 'disruptionist' impact on economic growth only for two quarters, the finance minister said.
File photo of Union finance minister Arun Jaitley.
Mumbai: The GST implementation was a "monumental reform" that impacted growth negatively only for two quarters, Finance Minister Arun Jaitley said on Sunday, hitting out at "critics and cynics" who blame it for hurting the GDP expansion.
The remarks come a day after former RBI Governor Raghuram Rajan blamed the indirect taxation reform for derailing the India's growth story. Jaitley did not name Rajan.
"You will always have critics and cynics who will come up and say it (GST) slowed down India's growth," Jaitley said, speaking at state-run Union Bank of India's 100th anniversary celebrations event here over a video link.
The finance minister said after suffering for two quarters, growth increased to 7 per cent, then to 7.7 per cent and went up till 8.2 per cent last quarter and specifically pointed out that this is much higher than the 5-6 per cent expansion achieved between 2012-14.
The Goods and Services Tax (GST), India's biggest tax reform since independence which came into force on July 1, 2017, had "disruptionist" impact on economic growth only for two quarters, he said.
On Saturday, Rajan had said that the twin shocks of demonetisation and subsequently GST were the two major events that held back India’s economic growth in 2017.
Rajan also said that seven per cent growth rate is not enough to meet the country’s needs. “The two successive shocks of demonetisation and the GST had a serious impact on growth in India. Growth has fallen off interestingly at a time when growth in the global economy has been peaking up,” he said.
Jaitley also said there is a need to bring down non- performing assets (NPAs) in the banking system in order to strengthen the banking system and support growth.
"To maintain the strength of the banking system and help India grow, we need to minimise our NPAs. Various, multiple options have been exercised," he said, adding, experiments are bringing results certainly.
Strength of the banking system has to be improved so that liquidity in markets is maintained, Jaitley said.
Get the best of News18 delivered to your inbox - subscribe to News18 Daybreak. Follow News18.com on Twitter, Instagram, Facebook, TikTok and on YouTube, and stay in the know with what's happening in the world around you – in real time.
Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months. Use code FREEDOM.
|Power Grid Corp||207.05||-1.94|
Recommended For You
- Jio Effect: Hathway 100Mbps Plan Priced at Rs 699, Play Box Android TV Box Available at Rs 899
- Maruti Suzuki Can't Afford to Discontinue Diesel Cars in India – Here’s Why
- Labuschagne Replaces Smith to Become First Like-for-like Substitution in Cricket
- Weekly Tech Recap: Realme 5 Series Launch, Reliance Jio Fiber, PUBG Mobile 0.14.0 Update and More
- PV Sindhu Chases Elusive Gold at BWF World Championships