The execution of the GST was a ‘monumental reform’ which disturbed the economic growth for only two quarters, Finance Minister Arun Jaitley said replying the ‘cynics and critics’ who criticized it for affecting the growth of GDP.
The statement came after a day of Ex- RBI Governor Raghuram Rajan criticized the GST for bothering the growth of India. Rajan had said that the growth of the Indian economy was quite good during the 2012-2016 period, however, both GST and note ban proved to be harmful to the growth rate. It resulted in a drop in the growth at a time when the world economy was on the boom. Jaitley, however, did not point out the name of Rajan during his statement.
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Talking at the 100th-anniversary celebration of state-run Union Bank of India, Jaitley said, “You will always have critics and cynics who will come up and say it (GST) slowed down India’s growth.”
The Finance Minister said that after the decrease in two quarters, the growth rapidly expanded from 7 percent to 7.7 percent and then to 8.2 percent last quarter and it was observed that this was more than the 5-6 percent growth which was attained between 2012-2014.
The GST came into existence on July 1, 2017, as a massive change of tax since independence and only for two quarters it had “disruptionist” effect on economic growth, he said.
Jaitley said that to toughen the support growth and banking system, it is important to lower the non-performing assets (NPAs) in the banking system.”To maintain the strength of the banking system and help India grow, we need to minimize our NPAs. Various, multiple options have been exercised,” he said, also adding that surely the experiments are giving results.
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Jaitley said, to continue the excess of cash in markets, it is important to toughen the banking system and to improve them.
