- Struck a blow to shadow economy, says Finance Minister Arun Jaitley
- Opposition blames demonetisation, GST for fall in economic growth
- Mr Jaitley says other nations positive about India's policy decisions
The government has been under attack from the Opposition as well former union ministers Yashwant Sinha and Arun Shourie who have attributed the economic slowdown to what they say is the poor handling of key reforms like demonetisation and the Goods and Services Tax (GST). Economic growth slumped to a three-year-low of 5.7 per cent in the June quarter, the lowest in three years.
"If we had indulged in populism, we would have said, 'alright, let people deal in a cash-dominated economy, let India continue to have a shadow economy and everybody prosper on that basis'... And therefore, we struck a blow to that kind of an economy. That's not populism. That was the right economic policy to follow, and obviously, I think there are many in the system who normally don't see beyond their nose," the Finance Minister, who is in the US to attend annual meetings of the International Monetary Fund (IMF) and the World Bank, said.
Saying that the global economy was also improving - citing growth projections by the IMF - Mr Jaitley said that "we should be looking at a much higher growth trajectory in the days to come".
The IMF, which had last week lowered its growth forecast for India for the current and next year, on Saturday said that the Indian economy is on a "very solid track" in the mid-term. Describing the notes ban and GST as a monumental effort, IMF Managing Director Christine Lagarde said it is hardly surprising that there "is a little bit of a short-term slowdown" as a result.
In a speech last week, Prime Minister Narendra Modi defended his economic policies asserting that fundamentals are strong and that the government is committed to reversing the setback of the June quarter. PM Modi stated that a "handful of people" are trying to spread a contagion of pessimism based on the slowdown of the June quarter.