Inflation under control, GDP unhurt by note ban: Modi

Prime Minister Narendra Modi today said his government has been able to tame inflation which had gone out of control before 2014 and no political party could raise the issue during the polls in five states. Modi also said that after the decision to demonetise high value currency notes, "many lies were hurled, rumours were created" that the economy would disintegrate, but the GDP figures of the last quarter have proved that the country is on the path of "fast-paced development".

The Prime Minister was speaking at an industry meet organised at ONGC Petro Additions Ltd's complex here. "We all know what were the economic challenges faced by the country before the 2014 elections. Inflation had gone out of control," Modi said. "You must have witnessed that in the elections held in five states all the political parties hurled whatever allegations they could at us. But during the entire campaign, no accusation was levelled against us on the issue of inflation," Modi said.

"Such things do not become news as there are no takers to it. But it is a very big thing that in such huge elections, no opponent discussed inflation. This means that the government has been successful in taming the inflation that had gone out of control," Modi said. He added that more efforts are on to bring inflation further down.

Hitting back at the opposition leaders, Modi quoted the GDP figure of last quarter and said that the country was on the path of progress. "In last November, after the decision (demonetisation of Rs 1,000 and Rs 500 notes) to fight black money and corruption, many lies were hurled, rumours were created and allegations were levelled that everything will disintegrate now and the economy will finish," Modi said.

"Of course, some people did face difficulties," he said, adding, "But the report of the last quarter ... the figures make it clear that the GDP did not go down as they had predicted. Nothing happened and the country is on the path of fast-paced development." The government recently pegged the GDP growth rate at a higher-than-expected 7.1 per cent for the current fiscal despite the impact of note ban.

The Central Statistics Office (CSO) put the growth rate for October-December -- the quarter in which the government banned 86 per cent of the currency in circulation -- at 7 per cent. However, the figures have been questioned by the opposition and several economists. Modi also said that political and business leaders globally have supported the demonetisation move.

"It is absolutely true that every sector will benefit, be it social or economic, when black money will be routed out of the system. The world is viewing this bold decision of India with respect," he said.