Time to discuss: A letter on GDP growth seen at 4-year low of 6.5%

This is with reference to your article, “GDP growth seen at 4-year low of 6.5%” (January 6). The rate of growth has declined from the highs of 7.55 per cent  and 8 per cent in 2014-15 and 2015-16, to the lows of 2013-14. The low growths are principally triggered by the demonetisation of high value currency notes in November 2016, which crippled the rural economy and supply chain. The avowed goal of flushing out black money, i.e. illicit money also flopped, for almost 99 per cent of the banned currency notes were returned to the banks. So if 99 per cent of the money were legally returned, was there only 1 per cent illicit money in the country? The second reason for the declining growth is the move to the Goods and Services Tax (GST), which though sound in principle, has been shoddily implemented. Even now businesses are struggling to understand the implications of GST on their products and services. Clearly adequate homework had not been done before propelling this legislation. Both these policy measures i.e. demonetisation and GST reform were pet projects of the Prime Minister. But none of the new policies have delivered. This is lamentable. Whenever we introduce any new policy legislation, we must work through the implications of these decisions rigorously, have national debates on them and have detailed manuals online for the benefit of the users. Political mileage, should not be sole criteria for introducing radical economic policies.

Rajendra Aneja, Mumbai
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