Terming India one of the “sweet spots” in the global economy, finance minister Arun Jaitley on Monday exuded confidence that it was only natural that the country’s economic growth would continue to be good on the back of a normal monsoon.
The minister’s optimism is backed by the fact that India remained the fastest growing developing economy last fiscal, clocking a 7.6% GDP growth despite monsoon deficit for the last couple of years at a time when subdued growth is pervasive throughout the world.
“When the going is good, everybody grows. But becoming the fastest at a time when everything was going slow is an example. It reflects the strength of the economy,” Jaitley said at the first-ever national conclave on mining here.
Citing the example of Brexit, Jaitley said when there was apprehension all over the world that it would have an impact on the currency and stock markets, India was among the few countries where the impact was limited. In fact, it (Brexit impact on India’s capital markets) lasted for only a day.
With the growth in GDP, the finance minister said the application of the mineral resources would improve and asked the industry captains to continue investing in the sector so that they could reap the benefit in future when the prices of their commodity look up.
“Prices are suppressed all over the world. This suppressed price regime is a cycle and this cycle doesn’t last long. It changes. If investors invest today, they will reap its huge profits in the future when the sector would unleash its energy,” he said.
Lauding the way minerals and other natural resources are being allocated now in a transparent manner through the auction process, Jaitley said it would benefit each and everybody living in the area or are associated with, thanks to the District Mineral Foundations (DMF). It has been made mandatory for the existing miners to contribute 30% of their royalty to the DMF that aims at well-being of the surrounding populace. The minister said the benefits would be better when the mineral activity gets better and the global economy would also grow faster.
“This is the beginning and there too, it is showing growth. In the coming years, when the global growth comes back to good levels, this experiment will also grow, the application of this mechanism will help. The minerals sector and those associated with it will do better,” he said.
The current government had in 2015 amended the MMDR Act, paving the way for auctioning of the non-coal, non-fuel minerals in the country. With this, the earlier days of dispensation route came to an end and now the highest bidder gets the mine.