Finance Minister Arun Jaitley during an event today has said that the government has effectively used the last 3 years to bring a series of structural changes that will help over the long term to expedite the process of boosting growth. The minister emphasised that attaining 10 per cent GDP growth rate is very challenging despite having achieved 7 per cent growth rate over the last 3 years. However, he said that to achieve double-digit growth, the country needs a boom period on the lines of the one that happened during 2003-2008 and only that kind of recovery mode will help India to reach a stellar growth level. Jaitley said that in the now structurally reformed India, each reform has its direction. He said, “India is increasingly becoming aspirational but the 1993 period is over and the direction of the economy will continue the way it is now.”
On concerns being voiced over economic growth and the need to push domestic demand, he said that has always been so, even during the 2011 slowdown. He added that in each period where the economy faced problems, domestic demand came to the rescue. India did not depend on global demand during the recession and eventually fell back on domestic demand to power growth. Speaking on tax slabs, he said that India is the only nation where 5 per cent tax rate is offered, the lowest in the world and is done to attract and encourage people to pay taxes.
Taking on Congress VP Rahul Gandhi, FM Jaitley said that India cannot have single-rate GST as it is impossible to implement a tax system that will have the same rate for a ‘hawai-chappal’ and a Mercedes car. On the lack of creation of jobs he said that informal sector creates the most number of jobs in India and the formal sector can only create up to a certain limit which it is doing.
To enhance job supply the government will be starting job survey exercise soon, said Arun Jaitley. He said that he believed the small, medium sector and the informal sector will be funded by the banks from the capital generated during demonetisation. The Finance Ministry, according to him will come up with a report on how much the banks can recapitalise. He said that the need of the hour is to focus on rural India and development of infrastructure that will find place in the upcoming budget.
Finally, on the criticism faced by the government for the 12 per cent taxation on sanitary napkins, Jaitley mentioned that reducing the tax rate will diminish domestic produce and it will make way for Chinese products to flood the Indian market.