BackDemonetisation may lead to temporary economic slowdown: Pranab Mukherjee
President Pranab Mukherjee was addressing the Governors and Lt Governors through video-conferencing from Rashtrapati Bhavan in New Delhi
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The government’s demonetisation drive may lead to a temporary slowdown of the economy while it immobilizes black money and fights against corruption, President Pranab Mukherjee said on Thursday.
Delivering his New Year’s address to governors and lieutenant governors in New Delhi, Mukherjee said everybody in the government has to be “extra careful" to alleviate the suffering of the poor which might become unavoidable for the expected progress in the long term.
“While I appreciate the thrust on transition from entitlement approach to an entrepreneurial one for poverty alleviation, I am not too sure the poor can wait that long. They need to get succour here and now, so that they can also participate actively in the national march towards a future devoid of hunger, unemployment and exploitation," he said.
Mukherjee said the recent package announced by Prime Minister Narendra Modi will provide some relief.
Modi, in his address to the nation on New Year’s eve, announced a range of schemes targeting the poor, lower middle class, senior citizens and small businessmen.
Mukherjee said the year that has just gone by was a year of mixed fortunes. “It began on a very promising note with the economy performing well, overcoming the weak global economic trends. GDP growth of 7.2% in the first half of 2016-17—same as that of last year—is a pointer to the fact our economic recovery has been on solid grounds," he said.
The Central Statistics Office will release the GDP advance estimate for 2016-17 on Friday.
“In 2014 and 2015, below-normal rains had caused rural distress. A good monsoon in 2016 is expected to improve farm production and increase rural employment and incomes. Though our exports have been affected by weak global demand, we have a stable external sector. Reviving exports will remain a challenge but we can overcome it by improving the competitiveness of the domestic industry," the President said.
Meanwhile, in his opening remarks as chair of the 16th Meeting of the Financial Stability and Development Council (FSDC), finance minister Arun Jaitley said though the world economy is quite fragile, India appears to be much better placed on the back of improvements in its macro-economic fundamentals. Jaitley said the government’s steps to eliminate the shadow economy and tax evasion are expected to have a positive impact both on GDP and on fiscal consolidation in the long run.
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