India has the potential to make nine to 10 per cent growth rate “a new normal”, Finance Minister Arun Jaitley said on Thursday while asserting that high growth was essential to meet the challenges posed by the country’s burgeoning young population.
“India has the potential to make nine to ten per cent its new normal in the years to come,” Jaitley said in his keynote address at the day-long conference ‘Deepening the US-India Commercial Partnership: The First Year of the Modi Government’.
“India’s own normal in terms of its growth rate has to target anything close to a double digit. India growing at five per cent, six per cent or even seven per cent is not an India that is going to face up this challenge (of large young population),” Jaitley said at the conference organised by the Center for Strategic and International Studies, a Washington-based top American think-tank.
He made the remarks in his maiden public appearance hours after arriving here to attend the annual spring meeting of the International Monetary Fund and the World Bank.
Listing out the steps being taken by the new Indian government like giving more financial powers to states, increased investment on infrastructure, emphasis on manufacturing, Jaitley said the roadmap laid out is to open the door for investment.
“By and large it is a welcome move in India. There are very few sectors now, almost insignificant, that remain closed. Everything has been opened up,” he said citing insurance, defence, railways and real estate sectors in this regard.
When both domestic and international investors come in, the next step is to develop a system in which investing in India itself becomes attractive.
Jaitley acknowledged that land reforms bill remains a contentious issue in India today.
“I have no hesitation in saying that the land law if it remains in the present shape is a big hurdle to employment creation. One of the areas where we are trying to ease the (land) acquisition process is creation of industrial corridor. This is capable of providing employment to a vast number of people in rural areas,” he said.
Jaitley said the government is trying to “narrow down” the period in opening up new projects.
“I have set up a new committee to look up into the whole mechanism of how, whole institution of prior permission can be replaced by regulatory mechanism where it is far easier to start your business just complying with the guidelines that have been stated in that area,” Jaitley said.
As these efforts would start yielding results in the next few years, Jaitley exuded confidence that India would enter a phase of double digit growth from what he hoped an eight per cent growth this year.
Referring to the latest growth rate projection of 7.5 per cent this year, Jaitley in response to a question said the feeling in India is this “is not our” real potential.
When the net impact of all the latest reforms is realised, he said, it is capable of “taking us close to what we thought we can never reach and today there is a realisation that that is a realisable target.”
Responding to another question, Jaitley said among various reforms labour laws will remain a challenge.