SME Times News Bureau | 03 Feb, 2020
The
government on Monday told the Parliament that the Indian economy is not in
recession, quoting IMF projections saying India continues to be among the
world's fastest-growing economies and its GDP is estimated to grow at 5.8 per
cent in 2020-21 and it ill surpass China with a growth rate of 6.5 per cent in
2021-22.
"The economy is not in recession. As per the National Statistical Office
(NSO), GDP growth, on average, was 7.5 per cent in 2014-19, which is the
highest amongst G20 countries. As per the IMF estimates, India continues to be
among the fastest growing economies in the world and its GDP is estimated to
grow at 5.8 per cent in 2020-21 and is further projected to surpass China with
a growth rate of 6.5 per cent in 2021-22," Minister of State for Finance
Anurag Thakur told the Lok Sabha in a written reply.
He said that the Index of Industrial Production (IIP) has improved as it
registered a positive growth of 1.8 per cent in November 2019 as compared to a
contraction of 4 per cent in October 2019 and 4.3 per cent in September 2019.
Contraction in September 2019 was the lowest point in the last six years.
The trends for coal, real estate, power, mining, automobiles, steel sectors of
Indian economy do not indicate recession, the minister added.
Thakur said food inflation as indicated by Consumer Food Price Index (CFPI) has
shown an uptick and has increased to 5.3 per cent in 2019-20 (April-December)
from 0.5 per cent in 2018-19 (April-December). The inflation in vegetables has
increased to 17.6 percent 2019-20 (April-December) from (-) 4.4 per cent in
2018-19 (April-December).
"Government has been undertaking continuous measures for improving the
overall investment climate and boosting the economic growth rate of the
economy. Introduction of Insolvency and Bankruptcy Code (IBC) in 2016 is a
significant step towards cleaning and strengthening the financial system of the
country. Implementation of Goods and Services Tax in 2017 stands out as the
most important measure for improving ease of doing business in the country.
This is reflected in the World Bank's Ease of Doing Business 2020 Report which
improves India's ranking by 14 positions from 77 in 2018 to 63 in 2019,"
he said.
"Make in India programme is a major initiative towards increasing the
indigenous capacity of the country to produce world class goods and services.
Continuous liberalisation has resulted in record and unprecedented inflows of
foreign direct investment into the country. All along, the government has kept
inflation under control, fiscal spending disciplined and current account
deficit manageable to ensure macroeconomic stability so necessary to sustaining
a healthy investment climate in the country.
"More recently, the government has cut corporate tax rate from 30 percent
to 22 percent to boost investment activity in the country. In particular, the
corporate tax rate has been cut to 15 percent for new domestic manufacturing
companies which is amongst the lowest in the world. This complements a cut in
the repo rate by 135 basis points during 2019 by the Reserve Bank of India and
mandating of banks to link their lending rates with external benchmarks for
reducing the cost of capital for investors," he added.