Updated: July 13, 2015 1:51:59 am
Sounding optimistic about the economy, Union finance minister Arun Jaitley on Sunday said rising tax revenues, new reforms and improving macro-economic fundamentals would take the growth in the economy to the “achievable level” of 8-10 per cent.
“There are some sporadic data which indicate a significant recovery,” Jaitley said. “Saturday’s indirect revenue data for the first quarter did indicate that the customs duty, excise duty, service tax, even without additional revenue measures were up 14.5 per cent over the past fiscal,” he said while speaking at a function organised by the National Bank for Agriculture and Rural Development here on Sunday.
“And if you take the additional revenue measures, they are up 37 per cent. With the ongoing reform process, and some more significant changes like GST in the pipeline, increased infra spending this year, emphasis on smart cities, when all these initiatives get onto the field, then India’s aspiration to cross that 8 per cent growth and get to the 8-10 per cent growth level is eminently achievable,” he said.
“The silver lining is that revenue situation with all these measures may be more comfortable when compared to last year,” he said.
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Further, he said that the department of agriculture expects a better rainfall in most parts of the country to result in higher production of oil seeds and pulses, which at the moment are a cause of concern in terms of inflation. “It appears that the rain gods may be kinder this year to us than they were last year,” Jaitley said.
Speaking at a Nabard conference on the agrarian distress and enhancing farm income, Jaitley said even in challenging times, India is being looked upon as a bright spot. “When we compare ourselves on surface with various international parameters and how world economies are doing, we may have some opportunity to cheer. Because even in challenging times, a 7.3 per cent growth rate last year and 8 per cent projection for the current year, give reasons for us to smile.” Jaitley said. The IMF has lowered the global growth rate to 3.2 – 3.3 per cent for the current year, he said.
The finance minister said, “We have a lesson to learn from Greece, and the big message is countries must learn to spend within their means.” He asserted that India is well tracked on a road map “where our own fiscal deficit, current account deficit and level of inflation are under control”.
The minister said “the choice that we are making between higher growth or redistribution of resources is actually a false choice. We need higher growth on one hand and targeted schemes and policies are needed to ensure that the benefits of growth reach those who have been left out.”
Jaitley said the agriculture sector presents its own set of challenges. While a double-digit growth in services sector and 7 per cent growth in manufacturing are conceivable, we have been unable to ensure even 4 per cent growth consistently in agriculture.
With productivity levels reasonably low and 85 per cent farmers being small and marginal, the agriculture sector is afflicted by higher input costs, low level of irrigation, high indebtedness, absence of an effective insurance mechanism and adverse impacts of climate change, he said. Despite these challenges, Indian farmers have been able to attain self sufficiency in foodgrains, he said.
Jaitley said a large chunk of investment needs to be channelised into rural infrastructure development, with special emphasis on irrigation. “States like MP which have invested in irrigation have seen almost immediate results. It is this example we need to emulate,” he said.
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