Indian economy not hit by demonitisation: Nirmala

Union Minister for Finance and Corporate Affairs Nirmala Sitharaman, Minister of State for Finance and Corporate Affairs Anurag Singh Thakur and others leave after the BJP parliamentary party meeting, in New Delhi, Tuesday, July 02, 2019. (PTI Photo)

India still a fastest growing economy and demonetisation has had no effect on the country's economy, Finance Minister Nirmala Sitharaman said in the Rajya Sabha on Tuesday.

Replying to questions during the Question Hour, the minister said that though the manufacturing sector has had a certain fall, it is not due to demonetisation.

Claiming that the economic growth is high on the agenda of the government, she said that in the last quarter, there could have been a fall and steps have been taken to improve the economy.

"But, we are still the fastest growing economy," she added.

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Nirmala said that the moderation in growth momentum in 2018-19 is primarily on account of lower growth in 'Agriculture and allied', 'trade, hotel, transport, storage, communication and services related to broadcasting' and 'public administration and defence' sectors.

"If the impact of low growth in certain sectors has impacted growth rate, particularly in agriculture and allied activities as also in financial and real estate and professional services, there has been a fall, particularly in agriculture based on third advance estimates, it is believed that there has been a 0.6% decline in the output," she said.

Nirmala said that if the United States' growth has grown between 1.6, 2.2, 2.9 and 2.3% in 2016, 2017, 2018 and 2019, and China's growth has also decelerated from 6.7, 6.8, 6.6 and 6.3%, India is still well above 7% at 7.3% growth.

"Over and above that, in order that institutions will have to extend more credit facilities for industry and for those entrepreneurs in the ground, the credit situation and also taking care of resolutional stressed assets through banks is also happening," she added.

In her written reply, the finance minister said, as per estimates available from Central Statistics Office, Growth of Gross Domestic Product at constant prices was 6.8 % in 2018-19, as compared to 7.2 % in 2017-18 and 8.2 % in 2016-17.

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