Arun Jaitley’s comments have come in the backdrop of the slackening economic growth.
New Delhi: Amid growing concern in Central government circles over the stress on the economy, Finance minister Arun Jaitley on Wednesday said the government had taken note of all the indicators and additional measures would be taken to boost growth after he discusses the matter with Prime Minister Narendra Modi.
Mr Jaitley’s comments have come in the backdrop of the slackening economic growth, which hit a three-year low of 5.7 per cent in the first quarter of this financial year.
In fact, Mr Jaitley even conceded while replying to questions on spiralling petrol prices that there was hardly any private investment now and thus the government needed revenue to run its infrastructure schemes. He was interacting with the media after the meeting of the Union Cabinet on Wednesday.
The gravity of the situation could be gauged from the fact that Mr Modi had planned a meeting of secretaries of all economic ministries to discuss measures to curb negative trends on September 19, but it got postponed at the last moment. Mr Jaitley had later on Tuesday held deliberations with the secretaries of revenue, expenditure, economic affairs and financial services departments, where commerce minister Suresh Prabhu and railway minister Piyush Goyal were also present, along with Niti Aayog vice-chairman Rajiv Kumar and senior PMO officials.
Speaking to the media, the finance minister said, when asked about Tuesday’s meeting, that the government was considering additional measures to bolster the economy.
“We have taken note of all economic indicators which are available. The government will take any additional moves which are necessary. I am not in a position to announce anything right now. I will certainly consult the Prime Minister before that, and when we decide, you will come to know,” he said. Mr Jaitley added that this was a proactive government and was reacting to the situation as when the situation demanded.
Two years ago, India was touted as a rare bright spot in a gloomy global economy, with GDP growth outpacing a slowing China. But since early 2016, GDP growth has fallen for six consecutive quarters, slumping to a three-year low of 5.7 per cent in the April-June quarter, with India losing the fastest growing economy tag to China for the second straight quarter.
The finance minister, when asked about spiralling petrol prices despite global crude prices being at an all-time low, claimed it was a temporary phenomenon. “You have to consider many factors. The hurricane in the US, the refining capacity has been impacted to a large extent. Due to this there is demand-supply mismatch, there is a temporary spike,” he said.
He blamed states for levying hefty VAT, which also led to a spike in petrol prices and negated the benefit of low prices when oil marketing companies used to review the rates on a fortnightly basis.
Mr Jaitley, however, gave no indication of a cut in excise duty on petrol and diesel to cushion the rise, saying the government needed revenue to support public spending, without which growth will suffer.
“You should remember the government needs revenue to run. How will you build highways?” he said. “The government has increased public spending on infrastructure... Whatever (GDP) growth is there, it is fuelled by public spending and FDI. If public spending is slashed, it will mean cutting down expenditure on social sector schemes,” he said, conceding that there was hardly any private investment coming.