Vice-chairman of Niti Aayog, Rajiv Kumar today blamed former Reserve Bank governor Raghuram Rajan for the declining growth following the historic demonetization. In an interview to ANI, Kumar lambasted Rajan, saying that it was Rajan’s faulty policies on non-performing assets (NPA) and not the government’s decision of demonetizing currencies worth Rs 500 and Rs 1000 that ultimately slowed down India’s economic growth.
Speaking on the same lines, Rajiv Kumar said:
“The slowing of growth rate in the post-demonetisation period was not due to the decision to ban notes, but because there was a declining trend in the economy. Starting from last quarter of 2015-16, the growth rate had come down for six successive quarters.”
Further elaborating on the discrepancy on the part of the former RBI chief, Kumar said that the NPA’s rose to Rs 10.5 lakh crore in the mid-2017, which was more than Rs 6.5 lakh crore more than the amount when the NDA government took to its office after Rajan’s revised mechanism of identifying the NPEs. As a result of this huge gap, the banks stopped providing credit to the industry, explained Kumar.
He further said:
“The growth of credit came down to 1 or 2 per cent or even negative in some quarters.”
In saying so, he pinpointed at the present government’s endeavour to compensate for the same by ramping up the expenditure. You can watch a glimpse of the interview here –
— ANI (@ANI) September 3, 2018
It may be noted here that this interview of Niti Aayog vice president Rajiv Kumar comes amidst India’s falling GDP. The growth rate of India’s gross domestic product came at 6.1 per cent in the last quarter of the fiscal year 2016-17 – which was around three months following the period of demonetization. In the next quarter – the first quarter of fiscal year 2017-18 – the GDP slumped to a three-year low of 5.7 per cent.