Arun Jaitley envisages that GDP would grow more than 6 per cent in 2015-16 once the effect of all the proposed steps kicked in.
Budget 2015-16 would unveil “a whole set of second-generation reforms” as well as reforms that require undoing, Finance Minister Arun Jaitley has said.
“The coal ordinance is one undoing thing. Allocation of natural resources by non-discretion is undoing thing. A rational and reasonable tax regime is undoing thing. Some procedure changes in the land (acquisition) law is an undoing,” he said.
His immediate target, Jaitley added, was the insurance amendment Bill and Goods and Services Tax (GST) Bill.
Asked about the steps he intended to take, the Finance Minister said, “You see, you need a larger opening out, which is what we are doing. You will require to give another comfort to investors… stability of policy, stability of tax regime, (and) correcting whatever major aberrations have taken place.”
Jaitley envisaged that the GDP would grow more than 6 per cent in 2015-16 once the effect of all the proposed steps kicked in. From thereon, “we are going to take off”, he said. He also pitched for lower interest rates, observing that opening up should be followed with liquidity and cheaper capital. “So, it is a chain of events which has to take place,” he said, making a case for the Reserve Bank of India to cut rates in the monetary policy review slated on December 2.
Jaitley added that infusing liquidity into various sectors was necessary along with providing reasonable cost of capital.
Promising “a lot of exciting time ahead”, Jaitley said he saw investments coming into India. “On the ground some green shoots are visible. I do see domestic investors taking a lot of interest,” he said, adding it would still take some time before results start surfacing.
On land laws, he said, “Some dilution is required because this law can actually make development stagnant. I have no difficulty in higher compensation, I welcome it. But no access to land means what happens to infrastructure, townships, housing, industry and jobs?” he said.
To a question on the growth rate set for 2015-16, Jaitley said the economy has to first make a turnaround from the sub-5 per cent — 4.5 per cent and 4.7 per cent. “Manufacturing is still a challenge. Infrastructure expedition and manufacturing are two prime areas we have to get into so that expedition takes place. Once the effect of all these steps is visible, our ability to cross the 6 per cent mark increases.”