Union Finance Minister Arun Jaitley on Saturday said Indian economy has the potential to grow extra one or two per cent if decision making is “faster and decisive” and some of the issues facing global and domestic economies “don’t exist”.
“In spite of various adversities if India can grow between 7-8 per cent, faster than rest of the world, and given the situation where these adversities don’t exist and decision-making process is faster and decisive… to get that extra one or two per cent cutting edge that the economy requires is not an extremely difficult task,” Jaitley said at a function organised by the National Securities Depository (NSDL) to celebrate the milestone of crossing Rs 100 lakh crore in the value of securities in the demat segment.
“It’s a reasonably foreseeable task… that has the potential of an Indian normal,” he said about a higher growth target.
According to Jaitley, the world is passing through very challenging times. “There are many areas of business and trade which are passing through difficult moments because for them oil, commodities and metals (price fall) are their bread and butter. But what’s gloom for the rest is not necessarily a gloom for India,” he said.
“In some sense it becomes a boom for us,” the finance minister said. Jaitley said, “even in globally adverse circumstances we can maintain a comfortable 7-8 per cent growth what would happen if current challenges were not there.”
The export market is slow and exports are consistently going down because the buyers in the world are slowing down. “Then you had two continuous years of below par monsoon… fortunately we have surplus food-grains, food prices are not an issue and food stocks are not an issue. But the rural purchasing power has become an issue,” he said.
“You had sectors of the economy which stressed the private sector… private sector investment is a little low. This stress is also reflected in the health of the banks,” he said.
India is moving the direction of a greater market economy and a greater entrepreneurial economy, he said. “The policy domain has to be such that it creates enough speed and an equal environment where such investments are attracted and they grow and the potential of the economy grows,” Jaitley said.
“It will certainly need a private sector which will be much bigger than what we have today. It will need investments from institutions, foreign institutions,” he said.
“A small piece of the cake comes to the stock market. The size of the cake is expanding. The expansion will depend on the integrity of the institutions that manage the capital market. It also depends on the credibility of corporates who want to attract these savings into their systems,” Jaitley said.
“It’s the credibility of institutions and corporates and above all, the growth potential of the economy, which literally includes the growth potential of corporates, which will excite investors for better returns to go on a particular path,” he said.
According to him, these are exciting moments to grow. “Today those who support growth and those who support the idea of India is reforming itself to grow faster… that space is much larger than those who obstruct growth,” he said.