Shock of structural reforms behind us, says Arun Jaitley as GDP growth rebounds

Published On: 30, Nov 2017 | Source: Hindustantimes

Finance minister Arun Jaitley said on Thursday that the trend of deceleration in economic growth on account of structural reforms has reversed.

Jaitley said that the 6.3% growth in gross domestic product (GDP) in the September quarter compared to 5.7% in the June quarter of 2017-18 showed a turnaround in the trend of slowing growth witnessed in the preceding five quarters.

“Additionally, this indicates that perhaps the impact of structural reforms is behind us and, hopefully, we can look for an upward trajectory,” the minister said.

The government demonetized high-value currency notes last November and rolled out the goods and services tax (GST) in July this year, both of which impacted liquidity in the system and supply chains.

The growth figures endorse the government’s view that the disruption in the economy due to reforms will be short term.

The finance minister said that since May 2014, out of 13 quarters, the economy grew at over 7% in eight, while growth fell below 6% only once, in the June quarter.

Jaitley said that it is too early to predict the revenue collection trend in the GST regime as the new tax system is in the process of settling down.

The finance minister, however, expressed confidence that in due course indirect tax revenue will stabilize and the expected benefits of the tax regime will fructify.