Rajan's policies on non-performing assets (NPAs) led to the slowdown in the economy and not the government's decision to ban 500 and 1000 rupee notes, the Niti Aayog vice-chairman said in an interview to news agency ANI .
"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," he said.
#WATCH:Niti Aayog Vice-Chairman Rajiv Kumar on allegations that #demonetisation slowed down growth says 'This is a… https://t.co/CKKjfHjmhe
— ANI (@ANI) 1535962807000
Elaborating further on the causes for this decline, Rajiv Kumar lay the blame squarely on Rajan, suggesting that his stressed account policies led to a surge in NPAs in the banking sector.
He said the NPAs rose to Rs 10.5 lakh crore by mid-2017 from Rs 4 lakh crore when the present government took office due to Rajan's revised mechanism of identifying NPAs and thereby banks stopped giving credit to the industry, thus slowing down the economy.
#WATCH:Niti Aayog Vice-Chairman Rajiv Kumar says, 'Growth was declining due to former RBI Governor Raghuram Rajan's… https://t.co/Xdz2snwDM1
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"The growth of credit came down to 1 or 2 per cent or even negative in some quarters," Kumar said, while adding that the government is compensating for this by ramping up expenditure.
Notably, India's gross domestic product (GDP) growth rate came at 6.1 per cent in the fourth quarter of the fiscal year 2016-17 -- the three month-period that followed the note ban. In the following quarter (Q1 of fiscal year 2017-18), the growth rate slumped to a three-year low of 5.7 per cent.
from Times of India https://ift.tt/2LRUYS7
