CHENNAI: Finance Minister Nirmala Sitharaman has defended the dip in GDP growth to over six-year low of five per cent in April-June quarter terming it as 'cyclical' and said that the fall has not impacted the people as the government has ensured the inflation remains below four per cent.
Stating that if the inflation rose along with the fall in growth of the economy, it could have been a cause of concern, the finance minister said that government is working out solutions and taking steps to revive the economy.
On the spending of Reserve Bank of India surplus reserve of Rs 1,76,051 crore which was transferred to the government after approving all the recommendations of the Bimal Jalan-led expert committee, the finance minister said that a task force has been appointed by the government on how the money should be frontloaded on infrastructure as well as to boost the consumption index.
However, the finance minister was elusive on GST rate cuts for the auto sector. "It is for the GST Council to decide," said the minister. Amid the current slowdown in the auto sector, the industry demand was for an across-the-board GST rate cut from 28 per cent to 18 per cent. The auto industry has been hoping for a GST rate cut from 28 per cent to 18 per cent to bring it out of a demand slump.
On the job losses, the minister said the MUDRA scheme has generated jobs in the MSME sector. "We don't have data on the informal sector, as a result, the government can't comment accurately on how many jobs have been created," she said.
She also said interactions are being held not only in Delhi but across the length and breadth of the country with various economic sectors to work out strategies to ensure the creation of more jobs.
She also defended the bank mergers and said the effective dates for mergers should be decided by the bank boards. She also hailed India and Russia accord which will open a maritime route between the ports of Chennai and Vladivostok to ensure connectivity between the two countries.