Growth dip due to GST ‘teething troubles’, says BJP

The BJP on Monday asserted that the current economic slowdown only reflects temporary “teething troubles” related to GST, which is the “biggest reform since Independence”. The party termed demonetisation as a major step towards fighting corruption and formalisation of businesses operating outside the tax net.

BJP convened a special “extended” session of its national executive where a strong political response to contemporary issues including rising concerns over economic slowdown, especially criticism of GST implementation and demonetisation, was firmed up.

The party has described the impact of GST rollout and demonetisation, which are being cited as the principal reason for a dip in GDP growth, as “short-term pain for long-term gain”.

BJP President Amit Shah talked at length about the “turnaround” of the economy in the last three years, especially the end of policy paralysis, which prevailed during the UPA’s regime, improvement in all macro-economic indicators and restoration of investor faith.

A political resolution adopted at the national executive claimed credit for GST rollout and attributed the economic slowdown as a reflection of “teething troubles” for GST.

Briefing the media after the resolution was adopted, Union Minister Nitin Gadkari said, “Our political resolution describes GST, the ‘one-country-one-tax’ measure as the biggest reform we have done since Independence. There are teething troubles in the beginning but it would be of great service in ensuring better growth and strengthening the economy. Finance Minister Arun Jaitley was thanked by the national executive for the GST rollout.”

Replying to questions on GST and demonetisation, Gadkari said, “When any big reform takes place, there are initial problems, teething troubles. But we are working overtime to fill the gaps in GST rollout. The GST Council is meeting every month and every Ministry has been asked to look in to the problems in the sectors it governs.”

About demonetisation, Gadkari said this has resulted in ensuring transparency and weeding out black money. “Our income tax payees have doubled. Digital economy has grown. The quantum of black money has reduced. It is a short-term pain for long-term gain. Our economy will grow in double digits soon,” said Gadkari.

Shah, while delivering his inaugural address to the national executive, talked about the “decisive steps” taken by Prime Minister Narendra Modi which have resulted in a strong economy. While Shah’s speech was made in a closed-door session, the main points were discussed by Union Minister Piyush Goyal.

On whether there was a reference to the dip in growth and economic slowdown in the party President’s address, Goyal said: “There was certainly a reference to the growing strength of the Indian economy and how under the leadership of Prime Minister Modi and due to the strong and decisive steps taken by this government, we have been able to add great success in terms of the turnaround of the Indian economy.”

The Minister said the BJP President stressed on how a total transformation has been achieved in the Indian economy.

“We all remember the days when the fiscal deficit was over 4.9 per cent, when the current account deficit was almost at 5 per cent, the twin balance sheet problems that is often referred to by economists. Inflation was close to double digits, growth was down to 4.5 per cent and the rupee was losing value. The investor confidence was nil because of corruption and policy paralysis. As opposed to this, there has been a dramatic turnaround in the last three years,” said Goyal.

“There is fiscal stability and improvement in every macro parameter. The party president mentioned that growth has gone up to 7 per cent barring this quarter. Inflation is now 3-3.5 per cent, some months it has gone down to 1 per cent.

“Current account deficit was down to 0.6 per cent in some months. The President said this government has made the economy strong,” said Goyal.