Jaitley sees India’s growth exceeding 7.3% this year

Dubai - Structural changes enable the nation to withstand challenges.

The Indian economy is on track to grow more than 7.3 per cent in 2015 and higher next year despite the headwinds posed by the global economic slowdown that is negatively impacting larger economies, the country’s finance minister said on Monday.
Addressing the inaugural edition of the UAE-India Economic Forum, Arun Jaitley said the world economy is under great stress with almost every forecast indicating a negative trend in terms of growth statistics.
Outlining three key challenges faced by India, Jaitley said the global slowdown impacts the world market, which in turn poses challenges for large economies like India.
“Second, 55 per cent of our population is still dependent on agriculture and with the unpredictability of monsoon, their purchasing power has been reduced significantly. Third, while public and foreign investment in India has grown by 30 per cent and 40 per cent respectively, the rate of growth in terms of private investments is still sluggish.”
Sounding upbeat about India’s growth prospects, Jaitley said despite the weakness in rural demand due to poor rainfall in the last two years, the third largest Asian economy is expected to do better in 2016. A drought has also caused shortages that have led to a spike in prices of pulses and vegetables, he noted.
He argued that structural changes brought about by the Indian government recently have enabled the country to withstand several challenges. India’s consistent drive for growth, credibility of the country’s decision-making processes, bigger aspirations, greater stability and support in the direction of policy, quick approvals and a positive shift in terms of ease of doing business have helped the nation stand in good stead, the minister said.
In a move to speed up growth, New Delhi last week eased foreign direct investment (FDI) norms in 15 major sectors, including mining, defence and civil aviation.
Two days ago, addressing a conference in Mumbai, Jaitley predicted that India is moving in the direction of a greater market economy and a greater entrepreneurial economy. He stressed that India has the potential to grow an extra one or two per cent “if decision making is faster and decisive” and some of the issues facing global and domestic economies do not exist.
“What’s gloom for the rest is not necessarily a gloom for India. In some sense, it becomes a boom for us,” the finance minister said.
Earlier in the morning, welcoming Jaitley, Eng. Mohammed Ahmed bin Abdulaziz Alshehhi, Undersecretary, the UAE Ministry of Economy, said India and the UAE share a very special bond of friendship and partnership.
“We welcome the improvement in legislation and laws in India to promote business in the country. There are many success stories of UAE investment in India. The Indian community in the UAE is quite active and we welcome their contributions in the growth of the UAE economy. We look forward to more investments and increased trade opportunities between the two countries.”
Dr Jyotsna Suri, president, Federation of Indian Chambers of Commerce and Industry, said Prime Minister Narendra Modi’s visit to the UAE helped bring a transformation in the bilateral relationship. He said that India has emerged as the number one FDI destination ahead of China and the US and that the country has also moved up in the latest rankings on ‘Ease of doing business’ brought out by the World Bank.
Sharief Habib Al Awadhi, CEO and director-general, Fujairah Free Zone Authority, said 40 per cent of the free zone’s businesses are from India.
— issacjohn@khaleejtimes.com