A day after India became the fastest growing major economy in the world, Finance Minister Arun Jaitley has said India’s growth will further improve with a good monsoon and after it moves to a uniform Goods and Services Tax regime.
The latest growth figures say that India recorded a faster-than-expected growth of 7.9 per cent in January-March quarter and 7.6 per cent in the entire 2015-16 fiscal.
Jaitley asserted that these were not “stray figures” and an analysis of the pattern shows inherent strength in the economy.
“Last two years, a number of factors were loaded against us – there was a global slowdown and we had two consecutive below normal monsoon rainfalls,” he said.
“Reform process is going to continue. Hopefully, Goods and Services Tax (GST) bill is passed (in ensuing monsoon session of Parliament), which has the potential to add to GDP growth. Also, our infrastructure and rural spending will add to that,” Jaitley explained.
An increased infra and rural spending will further accelerate the growth, added Jaitley.
On the forecast of a good monsoon this year, Jaitley said it “would mean an increase in agriculture production, more purchasing power and rural demand.”
The GDP expansion in January-March period bettered 7.2 per cent of December quarter and helped extend the lead over China, which grew 6.7 per cent in the March quarter – the slowest in the world’s second largest economy in seven years.
Earlier speaking at a meeting organised by Japan-India Business Cooperation Committee, he said investors looking for higher returns should park funds in India’s infrastructure and manufacturing sectors.
Jaitley noted that the Indian economy clocked 7 per cent growth rate in every quarter last fiscal despite an unsupportive global economy and two consecutive years of weak monsoon.
This has been possible because of increased public spending, the performance of India’s private sector and the confidence which foreign investors reposed in India by investing the highest ever even in the slowdown years, he added.
To woo Japanese investors Jaitley said, besides infrastructure, the manufacturing sector is the top most priority and provides very large opportunity to international investors to participate in India growth story.
“India today is passing through a very critical phase in its history. In 1991 we had a very important reform programme which was initiated, it proved to be very successful. We continued on that roadmap and I think what was left out is now being implemented. There is never a last day in the calendar of reforms, situations are dynamic, they keep changing, they keep progressing. Newer challenges come up and we expect newer responses from the government,” he said.
(With inputs from PTI)