P Chidambaram counters Arun Jaitley’s claims, says economy is ‘rapidly’ declining

P Chidambaram says the economic growth will further decline if the government does not take corrective measures.

By: Express Web Desk | New Delhi | Updated: June 1, 2017 8:51 pm
P Chidambaram, Arun Jaitley, GDP growth, Demonetisation Former finance minister P Chidambaram (File Photo)

Hours after Finance Minister Arun Jaitley said India’s GDP growth was ‘reasonable’ considering the current global situation, former finance minister P Chidambaram said the economy is ‘going down rapidly’. He added that the government has failed in all the three indicators which depict a vibrant economy – investment to GDP ration, credit growth and numbers of jobs created. India GDP growth for the year 2016-17 slowed to a three-year low of 7.1 per cent, the government announced yesterday. GDP growth for the March quarter was pegged at 6.1 per cent.

“There are three indicators of a vibrant economy – investment to GDP ratio, credit growth and numbers of jobs created; on all three, the government has failed,” Chidambaram was quoted as saying by news agency ANI. “If corrective measures are not taken, the economy will decline further.”

He also tweeted, “I had said Demonetisation will affect growth by 1-1.5 per cent. Spot on. GVA down by 1.3 per cent. Economy began slowing down in July 2016. Demonetisation made it worse. Between Q4 of 2015-16 and Q4 of 2016-17, growth declined by 3.1 per cent.”

The industry on Wednesday attributed the slow down in economic growth to the government’s decision to demonetise high currency notes last year. Ficci president Pankaj Patel had said the fourth quarter figures point towards moderation which can be attributed to to demonetisation. Assocham president Sandeep Jajodia had said, “One only hopes that the impact of demonetisation has played out and does not spill into the current financial year.

Addressing a press conference regarding the Narendra Modi-led government’s performance in the last three years, Jaitley had defended GDP growth saying, “There are several factors which affect GDP. Even before demonetisation, there was some slowdown. I do believe, that in the current global situation, a 7 to 8 per cent growth which is at the moment an Indian normal, is a reasonable growth. I don’t see any adverse impact of the GST.” He added that the NDA government has ‘restored’ the ‘credibility’ of the economy.

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