Note ban not the reason behind economic slowdown of the country: Niti Aayog Vice Chairman Rajiv Kumar

He said non-performing assets kept rising during the tenure of Raghuram Rajan as the Governor of the Reserve Bank of India.

"My views on GDP’s decline being unrelated to solely demonetisation & having begun way before with stricter norms of NPA by RBI under Mr Rajan R fact-based & self-explanatory but some misleading headlines have coerced me to reiterate that the discussion is on policies not people," Kumar tweeted.

He said: "GDP growth peaked at 9.2% in Jan- Mar 2016 but declined successively for 6 quarters. NPAs rose exponentially to 10.5 Lakh crore for loan’s given out during 2010/11-13/14 to rise & commercial banks virtually stopped lending to industry. Medium & small industry was particularly hit."

Kumar said he had once suggested the note ban move to cleanse the Indian economy.

"I had suggested demonetisation in 2008 and I would do it anyway, to cleanse our economy," Kumar told NDTV.

  "The declining trend for the last six quarters starting 2015-16, when the growth rate was as high as 9.2 per cent, was not a result of demonetisation. The growth was declining because of the rising NPAs in the banking sector. When this (Narendra Modi) government came to office, that figure was about Rs. 4 lakh crore. It rose to Rs. 10.5 lakh crore by the middle of 2017, because under the previous RBI governor Mr (Raghuram) Rajan, they had instituted a new mechanism to identify stressed NPAs. This continuously began to rise, after which the banking sector stalled credit disbursal to the industry. In fact, in some cases like that of the Micro, Small and Medium Enterprises (MSME) industry, credit actually shrank. It was a negative growth in some years," he was quoted as saying by the news channel.
 

Image: Rajiv Kumar Twitter page