India can surpass 7.5% growth rate: Jaitley

Mr.Jaitley met several investors on the first day of his trip to US Photo:Reuters   | Photo Credit: LUCAS JACKSON

India’s 7.5 per cent economic growth rate is not its “best potential growth rate” and there is “restlessness” in the Narendra Modi-led government to boost >economic growth and set higher GDP targets in the coming years, Union Finance Minister Arun Jaitley said.

Mr. Jaitley, who began his 10-day visit to the US yesterday, said that he is “extremely pleased” with what the government has achieved in the last one year but feels that India has the ability to do much better. He stressed that a series of reforms aided by a lot of investment particularly in infrastructure, improvement in manufacturing, agriculture will help escalate India’s economic growth.

Predicting an 8 per cent growth this year, he said the government will set higher GDP growth targets in the future. “I think our growth rate at the end of this year should certainly be around 8 per cent. (In) Future years, I am keeping my fingers crossed, our targets are going to be higher,” he said.

On whether India is now a better place of investment than China, Mr. Jaitley said that he does not compare the two because we have grown in recent years but China had a consistent 9 per cent plus growth rate for more than three decades.

When asked about the concerns over “renewed tax terrorism” in India, Mr. Jaitley said that it is a term coined by him and it is his responsibility to make sure that it does not happen in India again.

As far as direct taxation is concerned, “The age of that kind of >aggressive adversarial tax regime is over. We will probably have one of the more tax friendly regimes in India,” he said as he pointed out that he had announced in the budget that over the next four years, direct corporate taxes will be brought down to 25 per cent, a rate which is “globally very competitive.”

Mr. Jaitley also said that there were some categories of taxation like the retrospective taxation and he had “erased that fear”. Other “old issues” related to taxation will be sorted out soon, he said.

Mr. Jaitley met several investors on the first day of his trip and said that the reforms carried have resulted in positive impact on investments in India.

On the >US Federal Reserve signalling to raise interest rates later this year and its impact on the Indian economy, he said that Indian interest rates are already reasonably high and the country’s central bank were working to bring them down.

“In terms of investment, if there is an easing on the US, it certainly has an impact on the whole world. I can’t say Indian markets won’t be impacted but as far as the structures of the Indian economy are concerned, they have become far more stable. I don’t see any significant impact except some initial impact as far as the markets in India are concerned,” he added.

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Printable version | Jan 27, 2022 7:11:00 PM |

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