India's GDP growth rate for Q2FY20 has fallen to 4.5% from 5% in the April-June quarter -- the lowest in six years.
A day after the data came out, Prime Minister Narendra Modi said that the NDA government's first six months since re-election had seen “phenomenal reform momentum” in the country.
"From ending of Article 370 to economic reform, productive Parliament to decisive foreign policy, historic steps taken," wrote Modi.
The Prime Minister highlighted how the current government had cleared Industrial Relations code, slashed corporate tax rates to 22%, and 15% for new domestic manufacturing companies.
If one includes the surcharge and cess, the effective tax rate for existing companies would now come down from 35% to 25.17% which involved an outgo of Rs 1.45 lakh crore. Companies can opt for the higher tax rates or the new ones.
In a Saturday address, Home Minister Amit Shah echoed him.
Calling the current economic slowdown a "temporary phase", Shah reiterated that the Indian industry will join with the vision of the Modi-government to make India a 5 trillion-dollar economy by 2024.
The Home Minister assured the industry that the "government is standing solidly behind them and is tackling all the challenges in a proactive fashion".
The Union Home Minister said that the Indian Indian economy has moved from "policy paralysis, scams and corruption" to "bold, transparent and decisive decision-making" during Modi's tenure as Prime Minister.
He called the last 5 years a "detoxification of the economy" and anticipated that in the next five years a "series of reforms" will be taken to make India one of the most powerful economies of the world.
"Even fiscal deficit which was 4.5% in 2013-14 has come down to 3.3% and inflation has been checked at 3.3% from 5.9% earlier," he said.
The Prime Minister also stated that the government has approval for strategic disinvestment of the government shareholding in five public sector enterprises along with management control. He pointed out that his government has announced mega bank mergers to improve the health of banking sector and infused Rs 70,000 crore in the banks for 2019-2020. He also said that the BJP had kept its manifesto promise and extended the Pradhan Mantri Kisan Samman Nidhi to all farmers.
Shah added, "The vision of one nation one tax has been realised and a series of labour reforms are in the offing. On the front of ease of doing business, India was at the rank of 142 in 2014 but in the last 5 years we jumped to 77 and expressed hope that by 2024, India will be somewhere at the rank of 30."
These sentiments were echoed by Finance Minister Nirmala Sitharaman who also took to Twitter. Marking six months of the Modi-led government's second term, she said that significant steps have been taken for structural reforms of the country.
"Responses/interventions addressing the needs of the economy will continue," she added.
While many, including former RBI Governor and economist C Rangarajan have said that with the current growth rate, the 5-trillion dollar target is likely to become a pipe dream, the government remains optimistic. In the meantime, the RBI has lowered its growth full year forecast in two months to 6.1 per cent in its October policy review.
(With inputs from agencies)
