Policies of Raghuram Rajan led to India’s declining growth: Niti Aayog vice chairman Rajiv Kumar

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Niti Aayog vice chairman Rajiv Kumar on Monday blamed former Reserve Bank of India (RBI) governor Raghuram Rajan for the slowdown in country’s economy.

“Raghuram Rajan’s policies led to industries not receiving credits from banks,” said Kumar.

The growth rate came down in the post- demonetisation period was not because of demonetisation but because of the declining trend in the economy, starting from the last quarter of 2015-16, the growth rate had come down for six successive quarters. He further added that false narrative is being spread about note ban.

According to Kumar, the growth was declining because of the rising non-performing assets (NPAs) in the banking sector, adding to it, he said, “(NPAs) rose to Rs 10.5 lakhs crore by the middle of 2017 from Rs 4 lakh crore when Narendra Modi’s government took charge.

“The decline in growth was simply a continuation of a trend and not because of the shock of demonetisation as has been claimed. There is no conclusive proof to show that there is link between demonetisation and the slowdown of the economy,” Kumar said.

Even for the large industries, the growth shrank to 1.5 percent from 2 percent and in some quarters even negative. Never had we seen such a continuous and persistent year upon year deleveraging of credit. This is the primary reason of slowdown of growth. The current government ramped up public capital expenditure.

Kumar also said that demonetisation led to an increase in filing of income tax returns.