25 September, New Delhi
Acknowledging the dip in the country’s growth rate, Finance Minister Arun Jaitley on Monday said that the government was in the process of undertaking measures to change the “environment” and provide a boost to the Indian economy.
“The growth rate has been fine except in the last quarter, where there has been a little dip in the GDP growth rate. During April-June, services sector improved, but manufacturing brought it (growth) down,” he told reporters at the ongoing BJP National Executive Meet.
Pulled down by sluggish manufacturing, growth in the Indian economy in the first quarter of this fiscal fell to 5.7 per cent, clocking the lowest GDP growth rate since Prime Minister Narendra Modi assumed office in May 2014.
“Whatever steps are required to change the environment we are certainly in the process of addressing them,” Jaitley added.
The Finance Minister said that the “environment” was a result of three factors.
“This (low growth rate is due to three factors – (low) investment by private sector, which is also related to the ability of banks to support growth. Since GST (Goods and Service Tax) was announced to be rolled out from July 1, de-stocking took place in June and July. It resulted in higher sales, so services in fact went up,” he said.
The government is said to be considering a financial stimulus package following a sharp fall in latest key macro indicators such as the gross domestic product (GDP) and industrial production as well as a widening current account deficit.
On September 19, Jaitley had chaired a high-level meeting to review the economic situation and possibly discuss a financial stimulus package as the remedy for falling growth rate. The meeting was attended by Railway Minister Piyush Goyal, Commerce Minister Suresh Prabhu, Chief Economic Advisor Arvind Subramanian and Secretaries in the Finance Ministry — Ashok Lavasa, Subhash Chandra Garg, Hasmukh Adhia, Rajiv Kumar and Neeraj Kumar Gupta.