Washington: India may grow faster than 7.5 percent GDP growth rate it recorded last year if predictions of above-average monsoon rainfall come true, Finance Minister Arun Jaitley has said.
Indian economy, he said, registered 7.5 percent 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 yesterday.
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 percent 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.
Jaitley arrived in the US capital yesterday to attend the annual spring meeting of the International Monetary Fund (IMF) and the World Bank, in addition to meeting his Chinese and American counterparts.
During his week-long stay, Jaitley will also travel to New York to meet with private sector leaders with an objective to attract foreign direct investments to India.