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Govt working towards getting back earlier growth rate: FM
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SME Times News Bureau | 23 Sep, 2017
Finance Minister Arun Jaitley on Friday said the government was working
towards getting back the earlier growth rate numbers of the country and
was fully prepared for a "responsive action".
Jaitley's
clarification came amid reports of the government planning a financial
stimulus to give a boost to the economy as the GDP numbers in the first
quarter dipped to a low of 5.7 per cent.
"How do you maintain
balance -- support banks and at the same time maintain best standards of
fiscal prudence. The last part is the current challenge we are facing.
It seems the logical course to get back (to the earlier growth rate),"
Jaitley said in mumbai at the Bloomberg India Economic Forum.
"Lare
number of structural reforms have been taken in a year, but we have to
make sure that capital does come and also maintain best standards of
fiscal prudence. That is the balance we have to maintain. But there is
no need to panic. But responsive action is needed and we are fully
prepared for it," he said.
Jaitley said that there is need for
fiscal prudence in the economy as the real answer lies in finding
balance between structural reforms and growth.
"India and the
world must be rest assured that government in India is conscious of
this. So that the position we have gathered as the fastest growing
economy for three years, we should be able to retain that. That is the
level of aspiration we have," he said.
On being asked if the
current economic situation in the country was a challenge, he said that
there was no easy day in the management of the economy as every day was a
challenge.
"Everyday is a challenge. There is no easy day in
the management of economy. But we have learnt to live in an active
democracy because the luxury which the commentators have, we don't have
that privilege. We have to decide which way to go.
"If you don't
decide, the challenges arise then. You take your time to decide, but
eventually decisions have to be taken. There are multiple challenges,
there are some which can be immediately addressed and some are because
of external factors," he added.
On the challenge of addressing
banking stress, he said that the government was at an advanced stage of
consolidating and strengthening the public sector banks.
"We are
at an advanced stage of our strategy. We are looking at both
consolidating and strengthening banks. The object of consolidation is
creating stronger banks. I can't put a timeline though," he said.
He
said that when the issue of non-performing assets (NPAs) or bad loans
started rising, banks were given various enabling tools, which worked
only marginally.
With the Reserve Bank of India taking up top
bad loan accounts for resolution, he said its success would be
determined if the timelines were maintained.
"The crisis of the (bad) accounts can't be allowed to persist indefinitely," he said.
On
the roll-out of Goods and Services Tax (GST), Jaitley said he was
keeping his fingers crossed as "a huge chaos" was expected on the
technical side but added that the implementation has been much smoother.
"I was keeping my fingers crossed. I was pleasantly surprised
by the smooth rollout. Industry has taken to it. The returns have shot
up. I was expecting major technical glitches. Any system can get
glitches.
"This (GST) system has capacity of one lakh returns
per hour, but if 50 lakh people wait for the last day, it is a problem
that assessees are inviting on themselves. System can easily take 24
lakh returns per day," he said.
On the working capital blockage
issue being faced by exporters under GST, he said that the government
was "seriously looking into it".
"First two months may not be
sufficient indication though. There are still lot of things that can be
done to improve the export competitiveness of India," he added.
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