FM Says Growth May Sur­pass 7.5% If Mon­soon Fore­cast Comes True

Jait­ley says cur­rent rate not enough, the country has the “po­ten­tial” to do “bet­ter”

The Economic Times - - Economy - Press Trust of In­dia

Wash­ing­ton: In­dia may grow faster than 7.5% GDP growth rate it recorded last year if pre­dic­tions of above-av­er­age mon­soon rain­fall comes true, Fi­nance Min­is­ter Arun Jait­ley has said.

In­dian econ­omy, he said, reg­is­tered 7.5% growth in 2015-16 not­with­stand­ing con­trac­tion of global ex­ports and two con­sec­u­tive years of mon­soon deficit.

If the pre­dic­tions of good mon­soon were to come true, “we are ca­pa­ble of... im­prov­ing upon our growth rate”, he said speak­ing on the theme of ‘ Steer­ing In­dia to­wards Growth’ at an event or­gan­ised by Carnegie En­dow­ment for In­ter­na­tional Peace here on Wed­nes­day.

Jait­ley, on the first day of his 7-day visit to the US, said amid a weaker out­look across the globe, In­dia's ex­pe­ri­ence of strong eco­nomic growth, com­fort­able price sit­u­a­tion, low cur­rent ac­count deficit, and ad­her­ence to a fis­cal re­cov­ery path have pro­jected it as an out­post of op­por­tu­nity for global in­vestors.

He said the cur­rent growth rate of 7.5% was not enough as per its own re­quire­ment stan­dard and the country has the “po­ten­tial” to do “bet­ter”.

Ex­press­ing con­cern over the de­cline in In­dia's ex­ports, Jait­ley said the country's growth pa­ram­e­ters are on track and the govern­ment is mov­ing ahead on its re­form agenda with in­clu­sive­ness and suc­cess­fully meet­ing all its fis­cal pa­ram­e­ters.

“... in the cur­rent sit­u­a­tion, are we do­ing well? The an­swer is yes. But by our own re­quire­ment stan­dards, are we do­ing well enough? I think, we can do bet­ter,” he as­serted, adding that in an ad­verse global sit­u­a­tion, prob­a­bly one does set­tle for that rate.

In a glob­ally ad­verse en­vi­ron­ment, In­dia has man­aged to sus­tain growth “by putting some do­mes­tic poli­cies in place, by us­ing in­vest­ments and sur­pluses clev­erly”.

“One of the big­gest ar­eas of worry has been the de­clin­ing ex­ports,” the fi­nance min­is­ter added.

Not­ing that the global sit­u­a­tion has im­pacted ex­ports, both in value and vol­ume terms, Jait­ley felt that things could im­prove if some of the vari­ables change.

“If hope­fully with any of th­ese vari­able fac­tors growth re­turn­ing to the rest of the world, bet­ter In­dian mon­soon and con­tin­ued favourable en­vi­ron­ment of oil prices and the im­pe­tus of pol­icy di­rec­tion in In­dia and if the re­forms go on... our abil­ity to do much bet­ter would be there,” Jait­ley said.

Ear­lier wel­com­ing Jait­ley, Carnegie Pres­i­dent Wil­liam Burns, for­mer deputy sec­re­tary of state, said In­dia has a very im­por­tant role to play glob­ally, par­tic­u­larly in Asia.

In­dia has sur­prised China by emerg­ing as the fastest grow­ing emerg­ing econ­omy of the world. “Two years af­ter the BJP came to power, there is change in In­dia's eco­nomic sit­u­a­tion. Un­der the lead­er­ship of Prime Min­is­ter Modi and Jait­ley, In­dia to­day is the world's fastest grow­ing ma­jor econ­omy,” Burns said, adding that in­fla­tion has mod­er­ated and the govern­ment is com­mit­ted to re­forms. When the cur­rent govern­ment had taken over about two years ago, Jait­ley said, the sit­u­a­tion looked quite chal­leng­ing, but since then the global sit­u­a­tion has never been help­ful. In the 21 months, the key em­pha­sis of the Modi govern­ment has been “de­ci­sive­ness, con­sis­tency in terms of pol­icy di­rec­tion and trans­parency in func­tion­ing”.

“In terms of eco­nomic di­rec­tion, this govern­ment is yet to com­mit a ma­jor mis­take,” Jait­ley said.


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