The country's economy will soon start taking an upturn after recovering from the 'temporary blip' caused by the structural changes undertaken by the government, finance minister Arun Jaitley said on Thursday.
"I think the bottoming out of the economy is complete and now it should start moving upwards. The global economy is also moving up," Jaitley said while speaking at the Morgan Stanley annual conference on 'India: Structural Reforms and Growth Path Ahead', PTI reported.
He acknowledged that there was a "temporary blip" as a result of structural changes initiated by the government.
The central government last year withdrew 86 percent of currency from the system by declaring the highest denomination tenders (Rs 1000 and Rs 500 notes) as illegal.
Later in July this year, the government implemented the new tax regime of indirect taxes in the country—the goods and services tax (GST), which amalgamated all indirect taxes and cesses into one.
With two major reforms the economy going in a downward spiral, growth in gross domestic product (GDP) for the month of August hit a 4-year low at 5.7 percent.
However, the finance minister said that the country's basic economic parameters are quite stable. In a move to bring in confidence among investors, the minister said, "The combination of the IT scheme and now the large-scale recapitalisation we have announced should be put into motion expeditiously."
Jaitley further said that the combination of these two steps is likely to improve the capacity of the banks and even lend their surplus, particularly to the small and medium-scale industries.
Responding to questions from investors, he said among the privatisation of public sector units (PSUs), the government is looking divestment seriously and indicated that national carrier Air India's privatisation is in a very advanced stage.
"The state enterprises in the oil and some in the power sectors will be kept as PSUs. But there are many which will be privatised," he added.