No slow­down for In­dia de­spite global un­cer­tainty: Jait­ley

The Pak Banker - - COMPANIES/BOSS -

De­spite "con­sid­er­able" un­cer­tainty in the global econ­omy, In­dia's growth is set to con­tinue its world-beat­ing pace, ac­cord­ing to In­dian Fi­nance Min­is­ter Arun Jait­ley.

"I don't think we have a slow­down in sight for the rea­son that there is a lot of eco­nomic ac­tiv­ity gen­er­ated by in­creased pub­lic fund­ing, for­eign in­vest­ment, and ur­ban de­mand mov­ing up," Jait­ley said in an in­ter­view on Mon­day while vis­it­ing Ja­pan, where he hopes to dou­ble the num­ber of com­pa­nies in­vest­ing in In­dia from "a thou­sand odd" cur­rently. "So I don't think im­me­di­ately, any kind of a slow­down fear is there." As he com­pletes two years in of­fice, Prime Min­is­ter Naren­dra Modi is boost­ing ef­forts to re­verse a ru­ral slow­down that threat­ens to cost him state elec­tions. While In­dia is the world's fastest-grow­ing ma­jor econ­omy, in­vestors have been frus­trated by Modi's in­abil­ity to push through a na­tional sales tax and the un­cer­tainty sur­round­ing the fu­ture of cen­tral bank Gov­er­nor Raghu­ram Ra­jan.

Jait­ley in Tokyo said that the goods-and-ser­vices tax and a re­duc­tion of the cor­po­rate tax rate re­main an "un­fin­ished agenda" and should come soon. The next ma­jor pri­or­i­ties he iden­ti­fied in­clude mod­ern­iz­ing the na­tion's in­fra­struc­ture, spend­ing more on ru­ral ar­eas and strength­en­ing the so­cial se­cu­rity frame­work.

In­dia's gross do­mes­tic prod­uct ex­panded 7.5 per­cent in Jan­uary to March from the same pe­riod a year ago, up from 7.3 per­cent in the pre­vi­ous quar­ter, ac­cord­ing to a Bloomberg sur­vey of 27 economists. The data will be re­leased at 5:30 p.m. lo­cal time on Tues­day. The gov­ern­ment ex­pects to meets its budget deficit tar­get of 3.5 per­cent of GDP this fis­cal year, Jait­ley said. He added that the de­cline of com­mod­ity and oil prices has helped meet tar­gets to lower in­fla­tion in In­dia, the world's fastest-grow­ing im­porter of crude. Oil prices in "a 50 plus-mi­nus range is fairly ac­cept- able to us," Jait­ley said. Brent for July set­tle­ment, which ex­pires Tues­day, slid as much as 40 cents, or 0.8 per­cent, to $48.92 a bar­rel on the Lon­don­based ICE Fu­tures Europe ex­change. Eas­ing price pres­sures have al­lowed Ra­jan to re­duce the bench­mark in­ter­est rate to a five-year low of 6.5 per­cent. He's also work­ing with the gov­ern­ment to clean up as much as $120 bil­lion of stressed as­sets at com­mer­cial banks, ex­tend fi­nan­cial ser­vices to In­dia's re­mote villages and rid the sys­tem of per­verse in­cen­tives that en­cour­age com­pa­nies to de­fault on pay­ments.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.