Niti Aayog vice chairman Rajiv Kumar on Wednesday said the economic downturn which began in the last two years of UPA II regime has bottomed out and the growth will improve in the next two quarters.
Kumar also admitted that there have been problems on account of demonetisation and goods and services tax (GST) implementation but now people have adopted to the new tax regime.
“...this downward cycle of economic growth began in the last two years of the UPA II government and that downward cycle in my view has bottomed out. “We will be achieving higher growth in the next two quarters, and I think 2018-19 will be much better than the current year (in terms of economic growth),” he said at the AIMA diamond jubilee convention here.
India’s economic growth has slipped to a three-year low of 5.7% in the first quarter of the current fiscal. The Niti Aayog vice chairman also pointed out that in manufacturing and services PMI, the lowest point reached in July and therefrom it has started rising.
Kumar noted that historically countries which have adopted GST have all seen some decline in the growth rate because the system struggles to come to new norm.
“This formalisation of economy is going to take some cost,” he observed.
Applauding Modi government’s performance, Kumar said India has attracted foreign direct investment (FDI) worth $250 billion in the last three years. He also said Indian industry must serve national interest and not only interest of some segments of the society.
Kumar also emphasised on the need of creating trust between government and industry. Noting that Indian industry must embrace global cutting edge technology, the Niti Aayog vice chairman said one should think at global level and not just for domestic consumers.
He also suggested that Niti Aayog should work more with states.
Earlier speaking at the same event, Niti Aayog CEO Amitabh Kant said India cannot grow without gender parity as currently only 24% of GDP comes from women. Kant also said it is important to have consistency and predictability in government policies.