‘We have put the train back on the rails. It is now accelerating’

PRICE WATCH Non-inflationary 8% growth rate is needed for 10-15 years

NEW DELHI: The government has put processes in place, and results will be visible in 6-12 months, minister of state for finance Jayant Sinha told HT in a freewheeling interview. Excerpts:

On what lies ahead

What we have to focus on over the next two three years is implementation. I think we have got our policies in place and now to achieve the economic stabilisation we have to ensure the execution of these policies, we have to ensure that railway lines have to be laid, national highways have to be built, bridges have to be built and the social security scheme has to be adopted. So really the focus over the next two-three years is going to be not just the last mile problem but run through to a last person problem.

On economic growth, job creation and business sentiment

I am less worried at the GDP growth rate on a year-to-year basis but rather what I think is very important for the economy is… to be able to have a non-inflationary growth trajectory where we are growing consistently at 8% and over. For the next 10 or 15 years that is what is necessary to ensure India achieves its potential.

You have a lot of people talking that business conditions are difficult or the job creation has not happened as yet: That is exactly to be expected when you go through a year of consolidation. But now that we have gone through the consolidation phase we have put the train back on the rails and the train is now accelerating because of the cyclical upswing and the structural boost and public investments that we are doing, we are going to see the economy taking up. So if you ask me, it will take another 6 to 12 months before business conditions start to feel as if they are in a really good situation.

On the impact of poor rains

We have gone through a dif- ficult monsoon last year and we were well prepared for that and this year we are again prepared; the 6-12 months… presumes a normal monsoon. If we get a monsoon same as last year then we will be fine. If we get a monsoon much below that, there is more agrarian distress and that’s problematic.

And in only that case it would further push the 6-12 months out.

I think the economy has started to do much better. We have started seeing a whole host of indicators whether it is FDI which has moved up quite a bit, whether it shipment of coal, whether it is the sale of commercial vehicles or cars, or whether it is consumer spending. These are physical indicators but before they show up as companies’ profits and earnings, then that will take some time.

On the new income tax form

I cannot tell you an exact date when the new forms will come out but yes, they are under process. Obviously as the finance minister has been saying that we are trying to make the forms as easy and streamlined as possible for the vast majority of individuals as possible…For a certain set of tax payers it is going to be complicated and it is complicated whether it is in India or in US or the UK and elsewhere.

On RBI’s coming rate decision

All those who want to see a booming economy would want to see a rate cut and as the FM Jaitley has stated and chief economic adviser has said that is the stated stand of the government.

And personally I think the rates should come down, but ultimately it is RBI’s prerogative and I think we should leave it to them.

It is really good for us to have a very healthy tension with one set of eyes with one set of perspectives with the RBI and another set of eyes with another set of perspectives.

INTEREST-RATE CUT IS THE CENTRAL BANK’S PREROGATIVE AND SHOULD BE LEFT TO THEM, THE MoS SAID

On restrictions on cash use for buying jewellery

I have myself heard the (industry’s) representations and we are actively considering them before we come out formally on this policy.