Niti Aayog vice-chairman Rajiv Kumar on Monday blamed former Reserve Bank of India (RBI) chairman Raghuram Rajan for the declining economic growth over the last three years. Also Read - ED Attaches Rs 130 Crore Assets of Hyderabad-based Musaddilal Jewellers & Others in Demonetisation Case
Refuting claims of demonetisation to be the reason behind the economic slowdown, Kumar said that Rajan’s policies on non-performing assets (NPAs) led to the decline and not the government’s move to ban the Rs 500 and Rs 1000 notes. Also Read - When Will Indian Economy Revive? Here’s What NITI Aayog Vice Chairman Rajiv Kumar Has to Say
“The slowing of growth rate in the post-demonetisation period was not due to the note ban, but there was a declining trend in the economy,” said Kumar. Also Read - Four Years of Demonetisation: PM Modi Hails Transparency, Congress Calls it 'National Tragedy'
“The NPAs rose and the GDP growth rate declined because under the previous governor (Raghuram Rajan), they had instituted new mechanisms to identify NPAs and these continuously grew, following which the banking sector stopped giving credit to the industry,” he added.
Kumar said that the growth rate had come down for six successive quarters starting from the last quarter of 2015-16.
He further claimed that 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 laying down of new policies.
The Niti Aayog vice-chairman also lashed out at former Finance Minister P Chidambaram and former Prime Minister Manmohan Singh for backing the claim that demonetisation slowed down the economy. “This is a completely false narrative. I am afraid that leading people like Mr. Chidambaram and our former PM added to this,” he said.
Kumar’s assertion counter Rajan’s reiterated claim that he had made it clear to the government that the demonetisation was “not a good idea” and that its implementation was not “well-planned”.
Last Friday, speaking to news agency ANI, Kumar had said that the country’s GDP would grow at 8.5 per cent in the next quarter. Expressing happiness on the GDP data for the first quarter of the year (April to June), Kumar said that the numbers were in line with expectations.
The GDP growth for April-June quarter of 2018-19 has been recorded at 8.2 per cent. This is the first time after eight quarters (since first quarter of 2016-17) that the economy grew at over 8 per cent.