New Delhi: The economy slowed down in 2016-17, with the gross domestic product (GDP) declining drastically from 8 per cent in 2015-16 to 7.1 per cent, the government said on Friday, but added that the graph will soon be on an upward swing.
Finance minister Arun Jaitley said slower economic growth reflected lower growth in the industry and the services sectors due to structural, external, fiscal and monetary factors.
The statement came a day after the Centre announced that it was borrowing Rs 50,000 crore more from the market. On Friday, India reported a fiscal deficit of Rs 6.12 lakh crore for April-November, which is 112 per cent of the budgeted target for FY18 due to fall in GST revenues.
During the same period of FY17, the deficit stood at 85.8 per cent of that year’s target. Replying to a question in the Lok Sabha, Mr Jaitley said that for the last three consecutive years, India has remained the fastest growing economy in the world.
He made the assertion after TMC MP Saugata Roy said that the country’s growth rate had plummeted to an all-time low of 5.7 per cent in the first quarter of 2017-18.
Even the IMF and the World Bank have said that India will be the second fastest growing economy, the finance minister pointed out.
Sharing figures to highlight that the economy’s fundamentals were strong, Mr Jaitley said, “In the first quarter, if one analyses the data in detail, the services sector rose by 8.7 per cent which was quite robust, which actually meant that people were making purchases.”
“The second quarter figures reflect that there was no effect of demonetisation,” he said. Mr Jaitley said the government has taken initiatives to boost growth, including giving a fillip to manufacturing, concrete measures for transport and power sectors as well as urban and rural infrastructure, comprehensive reforms in the foreign direct investment policy and a special package for the textile industry.
All indications seem to suggest that in the coming quarters the curve is going to be on an upward swing, he added.
