Slowdown in GDP matter of concern: Arun Jaitley

Finance Minister Arun Jaitley said on Wednesday that the slowdown in India's GDP growth in the first quarter to 5.7 per cent was a matter of concern.

"It is certainly a matter of concern that first quarter GDP has come down to 5.7 per cent and it's obvious therefore that it throws a challenge for the economy," the finance minister said.

He said there was a requirement to improve policy and investment to improve upon these figures.

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The finance minister attributed the de-stocking of inventories by the industry in anticipation of the Goods and Services Tax (GST)for an increase in sales and the reduction in manufacturing.

"That manufacturing has fallen is essentially due to the anticipatory impact of GST. Since it came in July, most manufacturers were de-stocking," he said, noting that services growth had, however, improved during the quarter in question.

"De-stocking of the manufacturing sector seems to have been completed, so the dip in manufacturing could be bottoming out from this quarter," he said.

"Gross fixed capital ratio turned positive, investment improved...services improved," during the first quarter, he added.

The finance minister attributed the roll-out of the GST for the "contradiction between services improving and manufacturing going down."

He said he was optimistic that the "curve could turn for the better" once GST was implemented.