Finance Minister Nirmala Sitharaman will present the Union Budget 2019 on Friday. (Photographer: Anindito Mukherjee/Bloomberg)

Budget 2019: India GDP Growth High On Government Agenda, Says Nirmala Sitharaman

The Indian economy is high on the agenda of the Narendra Modi government and it is taking steps to accelerate the country’s growth, Union Finance Minister Nirmala Sitharaman said Tuesday—three days before she presents the Union Budget 2019.

India’s GDP growth hit a five-year low of 6.8 percent in 2018-19, primarily due to lower growth in agriculture, trade, transport, communication and services related to broadcasting, Sitharaman said in a written reply to a question in the Rajya Sabha.

“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,” she said.

Expanding the PM-Kisan scheme to all farmers is one of the key economic reforms that the new government will undertake to address growth concerns in Rural India. A voluntary pension scheme has been extended to small and marginal farmers, as well as small traders, Sitharaman said.

The government has also constituted a prime minister-led five-member cabinet committee on investment and growth, she said.

An outreach programee for micro, small and medium enterprises, their expansion and facilitation across the country, liberalisation of the foreign investment policy and introduction of the Goods and Services Tax were a few of the economic reforms that were undertaken by the Modi government in its first term, the finance minister said.

Talking of the demonetisation move, Sitharaman said the note ban had a significant positive impact on the Indian economy.

“Since illegally held cash forms major chunk of terror funding, after demonetisation, most of the cash held with the terrorists turned worthless. Demonetisation led to instant extinguishment of high-quality fake Indian currency notes,” she said.

According to the finance minister, India’s digital economy received a significant fillip after demonetisation. “Growth of digital transactions in terms of value has increased to Rs 188.07 lakh crore in September 2018, from 112.27 lakh crore in November 2016. Digital transactions in terms of volume increased to 241.88 crore in September 2018.”

While there was short-term pain due to demonetisation, especially in the informal and cash-intensive sectors of the economy, those issue were taken care of very soon, Sitharaman said. Demonetisation also resulted in better tax compliance, greater tax revenues, formalisation of the economy and higher digital transactions, she said.

The Indian economy has achieved high GDP growth that averaged 7.5 percent in the last five years (2014-15 to 2018-19) amid significant improvements in macroeconomic stability, she added.

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