Salient points of press conference : BJP National Spokesperson Shri Gopal KrishnaAgarwal

 

SALIENT POINTS OF THE PRESS CONFERENCE OF THE BJP NATIONAL SPOKESPERSON SHRI GOPAL KRISHNA AGARWAL

In my last PC on 23^rd September I had said.

§  Economy is out of woods

§  Double digit GDP growth in the current FY.

§  High single digit GDP growth on sustainable basis

If you see the narration, everyone agrees to the robust economy recovery post Covid. Sustaining recovery we should know the challenges that our economy is facing.

Currently the biggest risk to global and Indian economy is premature hardening of interest rates on account of inflationary pressure. Oil and commodity prices are increasing across world, US inflation is on a 30 years high at 6.2 %. It is the result of economic policy followed by leading nations of the world in order to fight the economic fallout of Covid. Most nations followed large scale quantitative easing policies such as printing currency and helicopter money. These policies are now being termed as misplaced.

As per Monthly economic report of Ministry of Finance for October’21 “Hardening input cost and ripple effects of escalating global crude oil prices continue to pose concern”. Survey indicates that these concerns are still not embedded into demand side inflationary pressure in India. We did not resort to uncontrolled fiscal deficit financing. Our govt followed prudent economic policy in spite of intense pressure.

Modi govt followed calibrated approach in its economic response with staggered fiscal stimulus and focused and targeted delivery through DBT. In addition, as part of prudent economic management, govt followed counter cyclical policy, taking advantage of falling global crude oil prices for resource generation by raising taxes on them.

Now that crude prices have increased post pandemic and there is fiscal elbow space, we have reduced excise duty on petrol and diesel significantly. This step has been taken with following two objectives of keeping Inflation under control and support growth in consumer demand.

Govt approach to inflation is such that it remains under control and there is head room for RBI to adjust monetary policy to expand demand. Govt’s approach will ensure that RBI is not compelled for knee jerk reaction to suck large-scale liquidity or increase benchmark interest rates.

According to some media reports, reduction in excise duty on petrol and diesel by our govt will have the effect of releasing about Rs 44,000 crores from central excise reduction and another Rs 9,000 Crore + Rs.35,000 Crore from reduction in VAT by NDA ruled states, in the hands of domestic consumers, boosting demand

All NDA ruled states have followed suit and reduced VAT on petroleum products, but opposition ruled states, except one/two have refused to cut VAT. Nine opposition states: Andhra Pradesh, Chhattisgarh, New Delhi, Jharkhand, Kerala, Maharashtra, Tamil Nadu, Telangana, Bengal have refused to cut VAT.

Centre has paid Rs 1,00,000 crore as GST compensation to States and also Rs 1,59,000 crore as end-to-end debt financing. Centre yesterday announced, advanced devolution to states and will release two installments on 22^nd November.

An important challenge is emerging on the horizon is about tapering. It is reversal of Quantitative Easing(QE) policies being followed by the Central Banks of leading economies

As you would recall, the QE policies that was followed by US after 2008 Global Financial Crisis (GFC) was sought to be reversed in 2013. The macro-economic situation of India at that time under the so-called economist PM Shri Manmohan Singh had worsened that India experienced foreign exchange crisis and was on the verge of debt default, due to faulty policies followed by his govt post GFC. We had to face the humiliation of being a part of fragile five economies of the world in 2013

Leading Central banks once again are going to reverse the QE policies followed in the wake of Covid crisis. But because of the sound economic policies of Modi govt, we are very comfortably placed to handle the effect of tapering.

Our exports are booming and our foreign exchange reserves are at an all-time high level

§  Merchandise export increased by 62.5 % as on October 21 YOY

§  Agriculture product export growth is 21.8 % during April to August’21 over same period previous year

§  Doubling of net tax revenue, YOY

§  70 % Increase in non-tax revenue, YOY

§  GST collection all time high 1.3 lakh crore for September

§  Robust export growth of 42.3 % in October 21 YOY

§  PMIon manufacturing expanded to 55.9 and PMI in services expanded to 58.4 in October

§  Foreign exchange reserves $ 640 billion covering 14 months projected imports for the year 2021-22

§  MNREGA demand for work is at 17 months low

§  Situation Assessment Survey (SAS)on agricultureshows farmers income increased by 59 % between 2012/13 and 2018/19

 

            Many far reaching reforms are being undertaken. The month of October saw Govt. arriving at a decision on the privatization of Air India and the formalities are expected to be completed by the end of this calendar year.

The privatization of Air India is a very significant event. It is after 18 years that any PSU has been privatized. When the last time a PSU was privatized, people who would be eligible to vote next year in elections were not even born. 5/6 other PSU's are in the pipe line for disinvestment within this financial year. Disinvestment is a crucial part of second generation reforms being undertaken by the Modi Govt. and it would be wrong to see it as a means to generate resources.

 I must add here that the ten years of Manmohan Singh govt was the lost decade as far as the Indian economy is concerned.

Hon'ble Prime Minister today said that we have created a strong enabling environment for economy development, overcoming twin balance sheet problems of Risk Capital with private promoters and strength banking institutions to land. Now it is on the private sector to jump on this bandwagon.

I would like to end this PC by reiterating that the handling of the economy by the Modi Govt. in the aftermath of the covid crisis has been exemplary and assure everyone that our Govt. is taking all the necessary steps to ensure that India achieves high rate of economic growth on sustainable basis.

                                                                                                                                  (MAHENDRA KUMAR)

                                                                                                                                         Office Secretary