- Adi Godrej said slowdown was due to people not clearing goods in June
- He said this was because it was the month preceding GST launch
- He also said pessimism surrounding the economy was exaggerated
"I don't believe there has been an economic slowdown. People are commenting on the June quarter GDP figure, which was a low 5.7 per cent. That was mainly because growth in June was slow...April and May were not bad and June was slow because it was the month preceding the launch of GST, people were downstocking, not clearing goods," the chairman of the Godrej group told NDTV, reporting that his companies "have fared well in the July-September period."
He shares that assessment with the World Bank that says the deceleration in the first quarter is an aberration "mostly due to temporary disruptions in preparation for the GST," and that it expects the new national tax to "have a hugely positive impact on the economy."
Mr Godrej too has also strongly backed GST saying "it will add a lot of GDP growth to our economy going forward." Glitches like IT issues and on refunds reported by businesses should be addressed, and the government is doing that at the big GST Council meeting today, he said.
"The Prime Minister's speech was appropriate and important. Criticism based on the GDP growth rate exaggerated," Mr Godrej said, adding, "I am not at all as pessimistic as some spokespersons. I am quite optimistic about the future, the second half will do very well."
Amid attacks from the opposition, which has blamed big reforms demonetisation and GST, the Prime Minister had on Wednesday used his address to company secretaries at a function in the capital to allay fears about the decline in growth in the last quarter and said the government was "committed to and capable" of reversing the setback. He warned against "people who sleep well only after they spread a feeling of pessimism."
Union minister Piyush Goyal told NDTV on Wednesday that the economy is in "very good shape", stressing that the slowdown in growth is temporary, caused by the big and complex transition to a the new national tax.