Steps to Be Taken to Bolster Economy Soon: Jaitley Post GDP Slump

Arun Jaitley.

(Photo: PTI)

The government is working on additional measures to bolster economy, Finance Minister Arun Jaitley said on Wednesday, while maintaining that inflation is well under control.

GDP growth hit a three-year low of 5.7 percent in the June quarter.

The minister said an announcement with regard to the additional steps will be made after consulting Prime Minister Narendra Modi.

Jaitley has held a series of meetings in the past few days with some of his ministerial colleagues and senior government officials to take stock of the situation and take firm steps to push growth.

On Inflation

On inflation, Jaitley said it is still within the statutorily fixed monetary policy target of four percent.

During monsoon period, vegetable prices generally go up. This is a spike period. When it is 3.36 percent in the spike period, it is under control as per the traditional Indian standard.

Arun Jaitley

Retail inflation hit a five-month high of 3.36 percent in August.

“We have taken note of all economic indicators which are available... the government will take any additional moves which are necessary. I am not in a position to announce on Thursday in the press conference. I will certainly be consulting the Prime Minister before that, and when we decide, you will come to know,” he told reporters in New Delhi.

On High Oil taxes

Finance Minister Arun Jaitley provided no indication of any cut in excise duty on petrol and diesel to cushion the spike in rates, saying that the government needs revenue to support public spending, without which growth will suffer.

States levy a high amount of sales tax or VAT on fuel, he said without referring to the Rs 11.77 per litre hike in excise duty on petrol, and Rs 13.47 a litre on diesel between November 2014 and January 2016, which took away gains arising from plummeting international oil rates.

BJP-ruled Maharashtra levies 46.52 percent VAT (47.64 percent in Mumbai) on petrol, the highest in the country.

Andhra Pradesh has 38.82 percent VAT on petrol while BJP-governed Madhya Pradesh levies 38.79 percent VAT on the fuel.

Jaitley, however, said that the fuel prices will settle down soon.

(With inputs from PTI)

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