India will rejuvenate private investment: FM to world Inc
Confident of utilising the headroom available to the Indian economy, Finance Minister Arun Jaitley on Thursday said it needs some additional growth engines and the focus now is on reviving private investments. Inviting foreign players to invest in the infrastructure space, he exuded confidence that the stuck reform measures like GST would go through as the numbers in the Upper House will change favourably soon.
No reform proposal has actually got stuck for long so far despite India being a ‘noisy democracy’, he said. Jaitley was speaking at a breakfast session on ‘India: The next growth engine of the world’, organised by industry body CII and consultancy BCG here on the sidelines of the WEF Annual Meeting. “We have a very noisy democracy... But I am finding that there are more people who want to support the growth and the others are very minuscule minority... Any economy needs multiple engines of growth,” he said.
“In the past we had fewer such engines and we need a few more. Public investment is one that we are doing. We are concentrating on infrastructure and for the first time in history we have been able to rationalise the subsidies,” the Finance Minister added. According to him, people are eventually going to pay for the goods and services they want to buy and for the weaker sections technology would be used to ensure that the benefits reach the right target group.
Noting that a series of reform measures are pending, Jaitley said some of these become symbol of whether India would be able to cross this obstacle or not. “India is a noisy democracy but I am sure that we would be able to get all of them through. Some measures have got delayed but none of them have actually hit a complete road block,” he added.
In days to come India will have to focus on reviving private investments, Jaitley said, adding, “we are asking people from all over the world to become partners in India’s infrastructure growth story”.
“I have always said the current rate of 7-7.5 per cent is not our real potential and we have potential to add 1-1.5 per cent. There is still head space that we have and I am sure we would be able to reach that,” he said. On GST, Jaitley said the good news is that all states are on board and all political parties, except one, are also on board. “The paradox is that the party which drafted GST is not on board. But then the numbers in Rajya Sabha are going to favourably change soon and I am hopeful that the GST would be through,” he added.
Emphasising that the reform process has a key role for states, the Finance Minister said: “We used to talk about cooperative federalism but I am happy to see now that states are competing with each other to attract investments. “Most of the states that grow will actually add to the country’s growth rate.” He added: “We, of course, have our own challenges. There are 55 per cent people in agriculture and that sector has not enough for these many people. The sector itself needs to be strengthened and then we had two bad monsoons. “We were expecting to grow over 8 per cent, but inadequate monsoons not only led to agriculture production falling but the consumption power of rural economy also got hit.”
Stressing that opening up the economy completely is another area of focus, Jaitley said, Railways was one of the touch-me-not sectors, operated entirely by the government. “In railway infrastructure, we have allowed private sector participation and the next they are going to raise funds through bonds etc.
Next, we are going to modernise the train stations and these are the causes that have been welcomed by the country.”
On Defence, he said it was “completely closed although most of the purchases were from outside the country. We have opened up that sector and a lot of activities are happening there”.