At a time when the Narendra Modi government is facing criticism for the economic growth slowdown from all sides — opposition, party-men, global rating agencies et al — top industrialists choose to back Prime Minister’s vision and suggest that the growth is going to accelerate in the second quarter of the financial year 2017-18.
Yesterday, both Prime Minister Narendra Modi and Finance Minister Arun Jaitley hit out at the critics saying that the government was committed to structural reforms and necessary steps were being taken to remove glitches. Narendra Modi said the centre was committed to reversing the setback to growth in the April-June quarter and that structural reforms were undertaken during the last three years, including demonetisation, Goods and Services Tax, and the Insolvency and Bankruptcy Code, would help the country step up into the next league.
Top industrialist Sunil Mittal backed Narendra Modi by saying that it is his job to create hope. He further said that the Indian economy is doing extremely well as compared to its global peers.
Head of the Godrej group, Adi Godrej also spoke in government’s defence and said that the economic growth rates fell due to GST destocking in June and will likely recover in the second quarter of FY18. “There was an economic slowdown in the month of June, and there’s a good explanation to that. Since in the GST, many rates were coming down, there was destocking in June.”
“Even if you look at the April-June quarter, the lower growth was mainly in the month of June. We should wait for July-September figures. GST collection has done well in July and August. I personally feel the economy is doing well,” Adi Godrej added.
Finance Minister Arun Jaitley in a television interview launched a veiled attack at senior BJP leader Yashwant Sinha and said, “Those who do not have broad shoulders to either take bold decisions or implement such landmark decisions, really can only sit on the sidelines and comment on it.”
“But at the end of the day, it’s our responsibility as the government to make sure that these decisions work, work well, and remove whatever glitches come in the way of these decisions,” Arun Jaitley added.
India’s economic growth slumped to a three-year low at 5.7% in the first quarter of the current fiscal year post demonetisation and switch to the GST regime. The Reserve Bank of India (RBI) reduced its growth forecast from 7.3% to 6.7%, but industrialists feel the policies by the Modi government is going to fetch results in the long term. Bain & Company India chairman Srivatsan Rajan told CNBC the Indian government has done ‘many good things’ in terms of economic reforms and the two moves – demonetisation and the GST — would be beneficial in long-term.