Exuding confidence in India’s growth potential, Finance Minister Arun Jaitley said achieving 10 per cent growth was “reasonably possible.”
“This [10 per cent growth rate] is reasonably possible. That is where India’s potential is,” Mr. Jaitley, who is on the second leg of his nine-day U.S. tour, said.
“It is important that we reach that target, but it is more important that we sustain it for a couple of years,” the Finance Minister said at the American Enterprise Institute (AEI), a top U.S. think tank.
“If we are able to sustain it for a couple of years, then I think, we will be able to have direct benefits as far as India is concerned, more jobs, better economy and hopefully over the next 10 years or so deplete the poverty levels in the segments that are more impacted by it,” he said.
“I can’t say as to what figure India’s growth rate would achieve. But I am certainly of the view that the seven-and-a-half per cent growth that we are presently at is not India’s optimum potential. This year, we hope to touch about eight per cent,” he said.
If inflation stays at a moderate level, one should expect the interest rates to go down, which would directly impact and add to the Indian economy, he said.
“Once the cumulative effect of all these plus favorable global winds, I think the journey between eight and 10 per cent is not an impossible journey”.
The manufacturing sector was almost crawling, and the growth rate was around five per cent, Mr. Jaitley said.
“Now with a lot more money being invested in infrastructure and governments even conducting their fiscal policy in order to help the manufacturing sector, there is a significant growth possible as far as this area is concerned,” he said.
“Therefore the 'Make in India' programme, concentration on manufacturing, the impact of all these steps — coal mine auctions — I think in the coming years is going to up India’s manufacturing sector significantly,” he said, adding that the government has taken steps to boost up the small scale industries in the rural areas.
Goods and Services Tax (GST) has the potential to add at least one per cent to the GDP of India, he said.
“In terms of fiscal deficit, from an all-time high of six per cent plus, we brought it down to four per cent. Our current account deficit, last quarter was 0.2 which is quite an exciting figure for us. Capital formation has improved. Some trickling effect on the infrastructure area has just about started. Power sector has performed quite well,” he said.
He said the government still has pending work at hand.
“The Land Bill is a difficult challenge...I think, we will have to fight it out and explain the benefits of the land bill because it is intended for the development of India’s rural areas,” he said adding that he is very positive on GST.
