GDP had a 'little dip' in last quarter, admits Arun Jaitley; says manufacturing not demonetisation to blame

By PTI

New Delhi: Finance minister Arun Jaitley said the government was in the process of addressing challenges posed by the economy which had seen "a little dip" in the last quarter.

File image of Arun Jaitley. AFP

Jaitley, however, rejected the Opposition's criticism that the economy had been adversely affected by demonetisation, which was described as a "severe attack on black money" by BJP president Amit Shah in his address to the party's national executive.

Stating that the country's economy was sound, Jaitley said macro economic data in the last three-and-a-half years had shown it was "sounder than ever before" except for the "little dip" in the last quarter. "In the last quarter, there has been a little dip in the GDP, which I have already addressed," he added. "Whatever steps are required to change the (economic) environment we are certainly in the process of addressing them," Jaitley said.

Taking on the Opposition, the finance minister said the Congress-led UPA had not "taken a single step" against black money and corruption and added that tackling graft and eliminating black money were never a part of the UPA's political and economic agenda.

"It is obvious that any step against black money and corruption will never be supported by any UPA leader," he told reporters after the BJP's national executive meeting.

In the last three-and-a-half years of NDA rule, the government had taken several steps, he said, adding that those at the receiving end would be "uneasy" about these measures.

He said despite a slowdown in the last quarter, the services sector had actually improved in the April-June period. It is manufacturing which brought the GDP down, he added.

The minister attributed the slowdown to weak investment in the private sector that is dependent on banks' ability to support growth and to destocking ahead of the launch of GST on 1 July this year.

Earlier in the day, Union minister Nitin Gadkari told reporters that "teething problems" happen when major reforms such as the GST and demonetisation are undertaken. The BJP in its resolution said the government consistently resolved difficulties faced by the people and traders during the initial period of the implementation of the GST.

Asserting that the economy was stronger under the Narendra Modi-led government than during the UPA rule, Shah talked about various benefits of both demonetisation and GST, including bringing more transparency to the system.

The BJP chief cited several figures to make his point about the economy.