With the series of reform measures undertaken by the government in recent days like the ordinances on coal, insurance and land acquisition as well as liberalised foreign investment norms in defence, construction and railways, investments are picking up and the economy should grow faster in the days to come, finance minister Arun Jaitley said on Monday.
Speaking at the seminar on Invest in India at the Vibrant Gujarat Summit, Jaitley said that while these measures will take some time to bring in the required results in the economy, what needs to be done immediately is increase public expenditure in highways and the power sector.
He also said that he expects the goods and services tax to be implemented in the course of a year or two.
On the highway sector, the finance minister said that the money accruing from the recent hike in duties on petrol and diesel will be directly transferred to the National Highways Authority of India (NHAI). “In fact, as on December 31 we have transferred the fund to NHAI,” Jaitley said.
Speaking at the same seminar, chief economic adviser Arvind Subramanian said that growth slowdown has bottomed out and the pace of economic expansion is expected to accelerate now.
He said that apart from cooperative federalism, what has started now in the country is competitive federalism, which means that states are competing to get investments, and this has brought about good economics along with good politics.
The economic survey tabled in Parliament in July last year had forecast GDP growth in the range of 5.4-5.9% for the current fiscal, but the mid-year review report released recently put the figure at 5.5%. GDP grew at 5.3% in the July-September period, aided by government expenditure and a good show by the farm and allied sectors.
Meanwhile, Jaitley took the opportunity to criticise the UPA government, which he blamed for stalling investments in the country.
“We have always been of the firm belief that India and the government of India should be led by a political leader of stature. The Prime Minister should have the last word, he should be decisive and willing to take the consequences of those decisions. We cannot create structures outside the government to overrule decisions,” he said.
Complimenting Gujarat’s biennial investment summit, he said the Vibrant Gujarat Global Investors Summit “has evolved from a small event held in a modest hall 10 years ago to one of the foremost economic conclaves”. The finance minister said that other states following suit with their own investment summits recently was a “great sign for Indian democracy”.
Commenting on the Modi government’s track record in the past seven months, Jaitley claimed, “Today we have stability of policy, the direction is clear and our pace of moving in that direction is reasonably quick.”
Taking a dig at critics of the recent spate of ordinances promulgated by the Modi government, the finance minister quipped, “The biggest criticism of our government is why are decisions being taken so quickly. It is precisely because of this that India has to get over traditional mindsets of branding governments as pro-industry, pro-business activity or pro-poor.”