The sky is the limit for investments in India and its economic growth is sustainable because it has a lot of distance to cover, Finance Minister Arun Jaitley said on Saturday. “It (growth) is sustainable for the reason that India has lot of distance in terms of economic growth to cover,” Jaitley told Chinese state-run CCTV in an interview.
In view of this a lot of potential exists for investments in infrastructure, urbanisation, housing, power, water and the social sectors, he said. “For us today, the sky is the limit. That is the kind of investments we require. Therefore, a lot of economic activity has to go into it. Currently, public finances are taking the lead in doing so. I am sure that in due course as the economy is picking up, private sector will also boost this,” Jaitley said.
“Secondly we grew in the last two years despite the fact that we had less than normal monsoon. Monsoon plays a very important role in India’s economic growth. This year, hopefully, the monsoon seems to be all right,” he said. Jaitley stated that if the country has a good monsoon, that itself will help boost rural economy, rural purchasing power and would add to the economy. “We grew by 7.6 per cent last year. We will certainly maintain that and with good monsoon hopefully improve upon that.”
Last year, India surpassed China which posted 6.9 per cent growth rate. On the global infrastructure and economic growth, a subject in which he is going to speak at a seminar here on Sunday, Jaitley spoke about his concerns over the global economic slowdown. “In large populated economies like India, job growth is extremely important,” he said.
“How long will this (global slowdown) continue and how world will pull itself out of this situation and how does growth return to the world...I think it is inevitable irrespective of the theme of the conference this issue will dominate all economic discussions,” he said.
Jaitley added that India has a massive infrastructure programme and will decide on which of the projects under it could be referred to the Asian Infrastructure Investment Bank (AIIB) for funding. Jaitley made the remarks ahead of the crucial AIIB Board of Governors meeting which he attended.
The Beijing-based AIIB was officially established last year with authorised capital of $100 billion in which India and 56 other countries joined as founding members. China is the largest shareholder with 26.06 per cent voting shares. India is the second largest shareholder with 7.5 per cent followed by Russia 5.93 per cent and Germany with 4.5 per cent.
On Friday, the bank announced its first set of four loans totalling to over $509 million for infrastructure projects in Pakistan, Bangladesh, Indonesia and Tajikistan. Speaking to CCTV ahead of the meeting, Jaitley said India which has undertaken massive infrastructure development programme will decide on which of the projects should be referred to AIIB funding depending on the availability of finances.
“India has a massive infrastructure programme which is going on,” he said. “It covers railways, airport, sea ports, water supply, sewage, smart city creation, more urbanisation,” Jaitley, who is on a five-day visit to China, said. “Depending on the kind of finances which are available we would like to see which one of these projects, (or) some of them could be financed by the AIIB,” Jaitley said.
“India of course is the second largest partner in the bank after China. We have been cooperating with other emerging economies in the New Development Bank of the BRICS also. These are parallel institutions which are developing, because of the need for development finance,” he said,
While the Beijing-based AIIB is headed by former Assistant Chinese Finance Minister, Jin Liqun, D J Pandian from India is the Vice-President and Chief Investment Officer.
Chinese Vice Premier Zhang Gaoli said AIIB should forge close partnerships with the World Bank, Asia Development Bank and others in extending financial assistance to infrastructure projects.