Ex-RBI governor Reddy considers GST as distress to SMEs
Considering the GST and note-ban, former RBI governor YV Reddy on Sunday said that it is very difficult to make […]
Sarabjit Kaur December 11, 2017
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Considering the GST and note-ban, former RBI governor YV Reddy on Sunday said that it is very difficult to make a forecast on economic growth now but implementation issues related to GST are still gnawing at the small and medium industries, the impact of which will be visible only in the forthcoming quarters. Refusing to hazard a guess on GDP growth in the short-term given the “shocks” like GST, note-ban and the mountain of bad loans, Y V Reddy has said the economy requires two more years to “consolidate” and claw back to higher growth levels. It is very difficult to make a forecast on economic growth now or say when the economy will return to the potential growth levels of say 7.5 to 8 per cent, which is unlikely in the next 24 months, he said. “In a shock, the negative element is front-loaded. There will be some moderation, and there can be some gains. The pain is there now, the gains will come later. How much gains and in what gap are the issues,” Reddy told a select group of reporters. “My guess is it might take a couple years to consolidate. In a couple of years, we should at least aim to go back to 7.5-8 per cent growth,” the former central banker said. “The shock element is tapering off but the positive aspect is yet to come; and I hope it will come.” Reddy said the economy was helped by a positive shock for almost three years following the massive drop in crude price, which he underlined was at a third of what it was during his governorship.