New Delhi: Under attack, Prime Minister Narendra Modi on Wednesday admitted for the first time that there has been an economic slowdown but told critics not to spread negativity and promised steps to put the economy on the path of recovery.
“After 7.5 per cent growth in the last three years, there has been a fall. I am not negating it. The government is fully committed to tackling problems of the economy. We are ready to take decisions. The fundamentals of economy are very strong.
“We have taken a lot of steps. The financial stability will be maintained. We will take all necessary steps to give fillip to investment and economic development,” Modi said, addressing the start of the golden jubilee celebrations of the Institute of Company Secretaries of India.
The Prime Minister’s speech comes in the midst of a raging debate over the state of economy after a stinging attack by BJP leader Yashwant Sinha and the opposition parties over slowdown and job losses.
Modi asserted that all changes in policies were aimed at improving the lives of the poor, the lower middle class and the middle class.
After likening the critics to the Mahabharata character Shalya, the charioteer of Karna who always indulged in demoralising the king, Modi said there was a need to identify them.
However, while winding up his hour-long speech, he said his was a sensitive government that “welcomes even strong criticism and we will take note of them humbly and seriously”.
“I want to assure all, even our critics, that we don’t feel everything is wrong. But there is need to guard against spreading negativity.”
He said the critics were taking sadistic pleasure whenever growth numbers were low but would cast doubts when the Central Statistician Organisation came out with higher growth figures.
Apparently addressing concerns arising out of teething troubles in implementing the Goods and Services Tax (GST), he said his government was committed to removing the bottlenecks.
“After three months of GST implementation, we have seen what has happened. There have been difficulties is filing and technology problems. I have told the GST Council that they carry out a full review of things and whatever is needed to bring it back on track. We are not adamant. Whatever changes are required, the government is with you.”
In a speech loaded with statistics and comparisons with the previous UPA government, Modi said his government broke the policy paralysis of the past and took 87 reforms decision spread over 21 sectors including construction, defence, financial services, food processing and investment.
Addressing the professionals, the Prime Minister referred to demonetisation and the later campaign against shell companies and said 2.10 lakh of the 3 lakh suspected shell companies have been de-registered.
“After this cleansing operation, directors would also be vigilant. People are now understanding corporate governance,” he said.
The Prime Minister asked the company secretaries to train about 1 lakh dropouts in their profession on the nuances of GST so that they get gainfully employed in the sector.
He asked them if they could take a pledge to make India a “high tax compliant society” by 2022 without a single shell company.
Modi said that November 8, when he axed high denomination currency notes, would be remembered as the day when the battle to eradicate corruption started.
He said when the NDA government took over, India was among the new group of “fragile five” nations, considered a threat not only to themselves but to the global economic recovery.
“I am not an economist, never claimed to be one,” Modi said, adding that at that time inflation was higher than GDP, fiscal and current account deficits were high while the rupee was losing to US dollar.
“Now that those parameters have improved … they cannot even see the writing on the wall.”
Modi said in his tenure, inflation had fallen from 10 per cent to 2.5 per cent, current account deficit had slid from 4 per cent to around 1 per cent, fiscal deficit had come down from 4.5 per cent to 3.5 per cent and foreign exchange reserves had increased from $30,000 crore to $40,000 crore.
Reeling out figures, Modi said 1,100 km of railway lines were laid during a decade of UPA rule while 2,100 km had come up in his three years.
Capital expenditure was Rs 1.49 lakh crore under the UPA whereas it was Rs 2.64 lakh crore under the NDA.
He said 80,000 km of rural roads were built in the last three years of the UPA government while his government had already constructed 1.20 lakh km of roads in rural India.
“You will be shocked to know that after the liberalisation of 1991, construction sector received 75 per cent increase in FDI during the last three years while transport got 69 per cent more, mining 56 per cent, computers 53 per cent, electrical equipments 52 per cent, renewable energy 49 per cent, textile 45 and automobile 44 per cent.”
After June, Modi said, passenger car sales went up by 12 per cent, commercial vehicles 27 per cent, two wheelers 14 per cent, air travel 14 per cent, international freight 16 per cent and mobile telephone purchase 14 per cent.
“Would these activities have not created jobs? These happen when people’s trust grows and economy is doing well.”