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FM confesses that demonetisation affected industrial production

FM confesses that demonetisation affected industrial production :- Union Finance Minister of India – Arun Jaitley has said today that decrease in industrial production in the month of December was on account of the fallout of demonetization and expansion was expected in the coming months.

Arun Jaitley said that November and December (IIP figure) cannot be the representative of the period of this year. This is the demonetization period and compared to November, December was more challenging for the reason that in many areas old currency was allowed to operate. In December it had gone away.

He further said that what was available in December was that the remonetization was still at initial stages. In the subsequent months, you probably would see a greater indication of expansion of the formal economy.

The industrial production decreased to four-month low of 0.4 per cent in the month of December with consumer durables output plummeting by over 10% and an overall decline in manufacturing.

However, IIP in November had grown by 5.7% compared to a contraction of 3.4% in the same month a year ago.

Jaitley told media that we would like it to remain certainly in 4% figure. I personally believe it would remain in that there are no indications of any significant rise in commodity prices but this is one area where you always keep your fingers crossed.

Finance Minister Arun Jaitley, on setting up of Public Sector Asset Rehabilitation Agency (PARA), said that there are already vibrant asset reconstruction companies and the government wants to try them.

When asked if there is a plan for it, Jaitley said that I am not moving immediately in any direction.

Jaitley, talking about bank consolidation, said that it is very much on the table and there is a lot of movement on SBI front.

Further, Jaitley added that consolidation in SBI will help it become a global size bank.

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