Union Finance Minister Arun Jaitley has said that since inflation has moderated, “if RBI [Reserve Bank of India], which is a highly professional organisation, in its wisdom decides to bring down the cost of capital [it] will give a good fillip to the Indian economy.”
The Finance Minister was delivering the key note address at the Citi’s Investor Summit: ‘India – Poised for Higher Growth’. Also present were Finance Ministry officers and RBI Deputy Governor S.S. Mundra.
Mr. Jaitley said though the disinvestment targets for the current financial year were quite ambitious, he hoped to achieve them or at least come close to achieving them. He also said road shows for the planned disinvestments were under way in many parts of the world.
Later, Mr. Mundra told reporters that the recent cooling of retail inflation was a combined outcome of factors, including a favourable statistical effect of a high base last year, a downturn in global commodity prices and easing of vegetable prices. Official data released earlier this month showed retail inflation too had slowed in October to 5.5 per cent, against 6.5 per cent the previous month
The Finance Minister has on several occasions called for lower interest rates.
Domestic and international investors attended the summit.
Mr. Jaitley said the government had taken a series of measures for tackling infrastructure sector challenges and that many more measures were in the offing. He said he was in discussion with the Opposition members to make the necessary procedural changes in the Land Acquisition Act to avoid delays in the implementation of infrastructure projects. He also said that the government through its Budget had laid down a direction in which the economy is likely to proceed to restore investors’ confidence and assured them that there would not be any movement in the contrary direction.
Giving details of various economic reforms in the pipeline, he said he was expecting the Insurance Amendment Bill to be passed in the Winter Session of Parliament for which he was in touch with the Parliament Select Committee.
On the Goods and Service Tax (GST), the Finance Minister said he was in touch with various State governments for ironing out outstanding differences. He said States want to retain taxation authority for liquor and petroleum products. They also want entry tax and octroi to be kept out of the purview of the GST. The Finance Minster said that all these issues will be sorted out soon.
He will also apprise the Empowered Committee of State Finance Ministers about the draft Constitution Amendment Bill on GST before introducing it in Parliament.
