Demonetization had no effect on Indian Economy: Finance Minister

Days ahead of presenting her maiden Budget, Union Finance Minister Nirmala Sitharaman Tuesday said that the demonetisation did not have any effect on the Indian economy. The minister was speaking in the Rajya Sabha responding to supplementaries during the Question Hour.

Sitharaman said economic growth is high on the agenda of the Narendra Modi-led government and various reforms are being undertaken in many spheres to improve the GDP growth. Sitharaman will present the first budget of the new government on July 5th. 

"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 per cent decline in the output. If the impact on the low growth is because of outcomes from these sectors, the manufacturing sector has had a certain fall but which is not attributable to demonetisation," the minister said.

Sitharaman, who held the defence portfolio in the previous government, said that India is growing well above 7 per cent at a time when the United States has grown between 1.6, 2.2, 2.9 and 2.3 per cent in 2016, 2017, 2018 and 2019, respectively. She also said China’s growth decelerated from 6.7, 6.8, 6.6 and 6.3 per cent during the corresponding period.

In her written reply, the Finance Minister said as per estimates available from Central Statistics Office, the GDP at constant prices was 6.8 per cent in 2018-19, as compared to 7.2 per cent in 2017-18 and 8.2 per cent in 2016-17.

However, the Growth rate has been steadily falling in 2018-19, from 8 per cent in Q1 to 7 per cent in Q2, 6.6% in Q3 and 5.8% in Q4.

“Economic growth is high on the agenda of the Government. Various reforms are being undertaken by the Government in many spheres to improve GDP growth. The key reforms in Government’s new term include expansion to all farmers the cash transfer scheme ‘PM-Kisan’ providing income support of Rs 6000 per year, which was earlier limited to farmers with a land holding of less than 2 hectares,” she said.