We got upgrade for economy, says Jaitley

After stinging criticism by the Opposition of the state of the economy after demonetisation and GST reforms, and the associated job losses, Finance Minister Arun Jaitley on Thursday said that it was due to reforms undertaken by the government that India has been pulled out of the 'fragile five' tag levelled against the country during the UPA regime.

He said that the Centre now was in the process of bailing out public sector banks whose health deteriorated due to "reckless lending" in the previous regime. Jaitley said this while replying in the short duration discussion on the economy in Rajya Sabha.

Earlier, initiating the discussion, Congress leader Anand Sharma had said the demand for employment under MNREGA is increasing because there are absolutely no jobs anywhere else. "The UPA left India as one of the fragile five. We have got the upgrade for the economy. You left at 142 (ranking) in the Ease of Doing Business, we took it 42 rankings above at 100. Necessarily, some good work must have taken place to merit the rating upgrades," Jaitley said.

Albeit there was a slowdown in the economy in the past few months, but the main reason behind that weakness was the global slowdown. "There is a cost to structural reforms. Obviously, there is a slowdown in the economy for sometime. But of late, all the quick data points are indicating towards a recovery. Even private investment are showing the sign of revival," the finance minister said to the Opposition's allegation that the manufacturing sector was stuttering, capital formation was negative, credit off take was nil and the capacity utilisation in the industrial sector had come down at present. On the charges of slowing government revenues, Jaitley said the Opposition had a peculiar habit of demanding lower tax rates inside the House and criticising revenue loss outside. "The obvious consequences of tax rebate will be a revenue loss for the government," he said.

He also brushed aside the criticism of fiscal slippage under the Modi government, saying that fiscal and current account deficits were larger in the UPA regime. "India under the UPA had started losing credibility with large fiscal slippages, while the Modi government has brought it down to a marginal level," he said.