Finance Minister Nirmala Sitharaman will present the Union Budget 2019 on Friday. (Photo: PTI)

Demonetisation Had No Impact On Economy, Says Nirmala Sitharaman Before Budget 2019

Demonetisation had no impact on the Indian economy, and it is still the fastest growing the world, Finance Minister Nirmala Sitharaman told the Rajya Sabha on Tuesday—three days before she presents the Union Budget 2019.

The minister, while responding to supplementaries during the Question Hour, said the manufacturing sector has had a certain fall, but it is not attributable to demonetisation.

Economic growth is high on the government’s agenda and various reforms are being undertaken in many spheres to improve India's GDP growth, she added.

According to Sitharaman, the moderation in India’s GDP growth in 2018-19 was primarily due to lower growth in agriculture and allied sectors, as well as trade, hotel, transport, storage, communication, public administration and defence sectors.

“If the impact on low growth is because of outcomes from these sectors, the manufacturing sector has had a certain fall but that is not attributable to demonetisation,” the minister said.

There could have been a fall in growth in the last quarter, and steps have been taken to improve the economy. “But, we are still the fastest growing economy,” she said.

While U.S.’s GDP growth has been between 1.6 percent and 2.9 percent in 2016-2019 and China’s has decelerated to 6.3 percent, India is still growing above 7 percent at 7.3 percent growth, Sitharaman said.

According to estimates from Central Statistics Office, India’s GDP growth at constant prices was 6.8 percent in 2018-19, 7.2 percent in 2017-18 and 8.2 percent in 2016-17.

“Economic growth is high on the agenda of the government. Various reforms are being undertaken by the government in many spheres to improve GDP growth,” said the finance minister. The key reforms in the government's new term include extension of the PM-KISAN scheme to all farmers, she added.

The government has also launched voluntary pension scheme for small and marginal farmers and small shopkeepers or retail traders, she said adding that the government has constituted a five-member cabinet committee under the prime minister to focus on investment and growth.

Bloomberg Quint

Add BloombergQuint App to Home screen.