NPAs, not demonetisation, caused slowdown: NITI Aayog Vice Chairman

New Delhi : NITI Aayog Vice Chairman Rajiv Kumar on Monday said the slowdown in India's GDP growth rate is not solely due to demonetisation but because of the exponential rise in the non-performing assets (NPAs) which began way before the note-ban announcement.

He also dismissed reports of him blaming former RBI Governor Raghuram Rajan for the declining growth rate beginning FY 2016-17.

"GDP growth peaked at 9.2 per cent in January to March 2016 but declined successively for six quarters. NPAs rose exponentially to Rs 10.5 lakh crore -- for loans given out during 2010-11 to 2013-14 -- and commercial banks virtually stopped lending to industry. Medium and small industry was particularly hit," Kumar said in a tweet.

Earlier, various media reports claimed that Kumar blamed Rajan's policies for the declining growth rate over the last three years.

The NITI Aayog Vice Chairman responded: "My views on GDP's decline being unrelated to solely demonetisation and having begun way before with stricter norms of NPA by RBI under Mr Rajan are fact-based and self-explanatory, but some misleading headlines have coerced me to reiterate that the discussion is on policies not people."

Rajan joined as the RBI Governor only in September 2013 and was instrumental in instituting new mechanisms to identify non-performing assets.