Pinning hopes on ‘rain gods’ to be kinder this year, Finance Minister Arun Jaitley today said a better monsoon would help check food inflation, including in pulses.
Jaitley also said that rising tax revenues and improving macroeconomic fundamentals would take economy to an accelerated growth trajectory, while 8-10 per cent GDP growth was also not out of sight.
“It appears that the rain gods may be kinder this year to us than they were last year,” Jaitley said.
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.
“I hope their estimates turn out to be true,” Jaitley said, while expressing confidence that the monsoon should be good going ahead also, as was the case in June.
On tax revenues, Jaitley said, “There are some sporadic data which indicate a significant recovery.”
“Yesterday’s indirect revenue data for the first quarter did indicate that 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 the Nabard Foundation Day celebrations here today.
The minister said that the overall growth in indirect tax collection would be 37 per cent if the additional revenue measures are taken into account.
“The silver lining is that revenue situation may be more comfortable… compared to last year.
“And therefore 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 our aspiration to cross that 8 per cent growth and get to the 8-10 per cent level is not something which is completely out of sight.
“… (it is) something which may be imminently achievable,” he said.
Pointing to the recent IMF projection of 7.5 per cent growth vis-a-vis the global growth projection of 3.2-3.3 per cent this year, Jaitley said what we need is both higher growth and redistribution of resources.
“We need higher growth on one hand and we need to flag the concerns of the economy in those sections where the benefits of that growth process must reach first,” he said.
On Greece crisis, he noted that the world economy is passing through troubled times.
“We have the lesson from Greece to be learned. And the big message is that the countries must learn to spend within their means. If they didn’t do that then they will have unusual crisis confronting you. And therefore we are well tracked on a roadmap where our own fiscal deficit, CAD are broadly coming under control and inflation is under control.”
Last week IMF said pegged global economic growth at 3.2-3.3 per cent, while projecting India’s growth at 7.5 per cent for financial year 2015.