Future will remember us for new economic history: Govt

Arun Jaitley arrives in Parliament on Wednesday (Express Photo by Prem Nath Pandey/File)

Defending economic decisions such as GST rollout and demonetisation, Finance Minister Arun Jaitley said Thursday that while some of these measures may have caused inconvenience to the people in the short term, the country’s future generations will remember this government for writing a “new economic history”.

Jaitley, who was responding to a short-duration discussion initiated by Congress leader Anand Sharma on the state of the economy, the investment climate and rising unemployment, attributed the current economic challenges being faced by the country to the global scenario. He added there was drought in the country for the first three years of the incumbent government’s term.

“Anand Sharma said that economy is in a bad shape. I would like to ask what is the global scenario? When the global markets do well, everyone benefits from it… but please do not forget the state of the economy when you demitted office,” he said. He added India is the only economy that could maintain a growth rate of 7-8% in these challenging times.

To criticism of the way GST was rolled out, he shot back that the Opposition on one hand, outside Parliament, criticises the government and demands decrease in tax rate and on the other hand, inside Parliament, blames the Centre for falling tax revenue.

Opposition parties had also said the GST had crippled small-scale industries. Jaitley responded that businesses with turnover less than Rs 1 crore were being charged 1% tax, which is the lowest in the world.

Defending demonetisation of Rs 1,000 and Rs 500 notes, he said, “Is it okay for our economy to remain largely driven by cash transactions? Should there be no attempt to increase the base of taxpayers?”

Jaitley reminded the Congress that when it was voted out of power India was among the “fragile five” economies of the world. “If we get an upgrade from this position, then we must have done something right,” he added, referring to the Moody’s Investors Service’s decision to upgrade India’s local and foreign currency issuer rating after 13 years.

The Left parties, during the discussion, had criticised the government’s recapitalisation plan of over Rs 2.12 lakh crore for public sector banks. Responding to this, the minister said, “This bailout which we are doing is not a very ideal situation but because public sector banks are property of the government, it is our legal as well as moral responsibility to keep them alive… The idea is to keep the public sector banks alive so that the banks’ ability to support growth is not weakened.”

During the three-hour discussion, Sharma led the charge against the government saying statements of the Prime Minister on the country’s economy contradict ground realities and that the economy is not “galloping” but “gasping”. He cited falling investment, fixed capital formation, credit and exports. He also panned the government for making a windfall of the fall in international crude oil prices by not passing the benefit on to the consumers.

BJP’s Bhupendra Yadav said the UP and Gujarat election results were, in a way, validation of the government’s economic policies. Ramgopal Yadav (SP) noted the Congress was in power for 55 years and asked Bhupendra Yadav if that meant all its policies and decisions were worthy of appreciation. CPI’s D Raja accused the government of weakening the country’s fundamentals by disinvesting its share in the PSUs. Sukhendu Sekhar Roy (TMC), Anubhav Mohanty (BJD), Harivansh (JD-U) and T K Rangarajan (CPM) too spoke.