PM hits out at critics, defends demonetisation, promises ease in GST

Prime Minister Narendra Modi on Wednesday acknowledged that the country’s economy had plunged in April-June quarter but firmly insisted that this is not the first time that the GDP has fallen to 5.7% and his government would certainly reverse the slide.

Refuting criticism of his government's handling of the economy, he said a "handful of people" were trying to spread pessimism based on the slowdown of just one economic quarter. "Not everything that a critic says is wrong but one should refrain from creating a negative environment in the country."

Addressing the inauguration of Golden Jubilee Year of Institute of Company Secretaries of India, the PM said "there are some people who sleep well only after they spread a feeling of pessimism all around. We need to recognise such people."

This is the first time Modi has broken his silence after former Union ministers Yashwant Sinha and Arun Shourie warned that the two major reforms --demonetisation and the rollout of the new Goods and Services Tax(GST) were poorly timed.

Pointing out that even the RBI has predicted 7.7% growth in the coming quarters, Modi said, "I assure that the steps being taken by the government will put the country in a new league of development...I will not let the present problems jeopardize the future of the country."

He said it was just one-quarter of tepid growth under NDA versus 8 quarters of sloth under the previous regime. GDP growth dipped to 5.7% or below eight times during UPA regime when the nation was faced with high inflation, current account deficit and fiscal deficit, he said.

The PM assured traders who were facing problems with the rollout of the GST that all issues would be sorted out. "Three months after GST, we have got feedback on all nitty-gritty, and I have told the GST Council must review all problems now."

Modi also promised all businessmen and traders that the government would not harass them by digging up their past irregularities once they had switched over to the new transparent system of honest bookkeeping and payment of taxes and dues.

"I want to assure traders across the country. Hum Lakeer ke Fakeer nahihain. (We don't claim we know everything.) This government is with you and will do all it takes to make GST simpler," he said.

The PM said it would have easier for him to throw largesse at powerful sections who were upset with him now but the country would have suffered in the longer run. "The government very well understands the value of your hard-earned money. Our policies and schemes are focused at bettering life of the poor and the middle class. I will not let the present problems jeopardise the future of the country. This is the time of a big transformation, and realise the importance of honest and transparent governance."

Modi again defended demonetisation, saying that the cash to GDP ration has come down to 9 percent after demonetisation as against 12 percent before November 9, 2016. "Since June, commercial vehicle sales up 23% and passenger vehicles up 12%, two-wheeler sales up over 14%. Domestic air traffic up 14% in last two months, Air freight volumes up 16%, telephone subscribers up by over 14%. What would you say? These indicators show an uptick in urban demand & in the rural sector. This happens when people are confident," he said.