Economy now on track for double-digit growth: Jaitley

There is optimism in the air and the economy is set to achieve stronger growth, Finance Minister Arun Jaitley said on Friday, reiterating his government’s strong commitment to implementing the Goods & Services Tax (GST) from April 1 next year.

“There was a general environment of gloom before the BJP took over a year back. This has now been replaced by an environment of optimism,” he said at a press conference called to highlight the achievements of the Narendra Modi government’s first year in office.

The BJP-led NDA government will complete one year on May 25 and has organised a series of press conferences, which kicked off on Friday.

‘Green shoots’ Jaitley said there are two indicators that can be termed as ‘green shoots.’ First, bad debts (non-performing assets) of banks have declined to 5.2 per cent as of March-end 2015 from 5.64 per cent at the end of December 2014.

Second, indirect tax collections grew by 46.2 per cent in April to ₹47,747 crore, with excise duty collection logging over 112 per cent growth.

The Finance Minister said that decisiveness even in the face of obstructions has been the hallmark of this government.

“India has the potential to touch a double-digit growth rate, provided decision-making is quick,” he said, adding that the government is reforming and liberalising, but there is no place for crony capitalism.

On decision-making, he said, “If it takes us from 2006 to 2015 to decide on the GST policy, we don’t send the best signals globally. Therefore, when we obstruct, we must realise that it is eventually the journey to 10 per cent (gross domestic product growth rate) that we are obstructing,” he said, pointing a finger at the Opposition.

Opposition faulted Alluding to the UPA government, Jaitley claimed that the NDA government had not been dragged down by corruption charges and this, along with speedier decision-making, has improved the outlook for the economy.

He cited economic indicators such as falling current account and fiscal deficits and rising foreign exchange reserves as proof of a strengthening economy. The government estimates growth to be 8-8.5 per cent.

However, there are some concerns over GST and the Land Bill, both of which are being scrutinised by Parliamentary panels after Opposition pressure.

Jaitley sought to allay the concerns, saying getting the two Bills approved in the next session of Parliament is a priority.

The Modi government, Jaitley said, is both pro-growth and pro-development. “Our social security programmes will be one of the strongest ever in this country, but certainly the policy will be one of arms-length distance, in terms of decision-making, from individual business houses.”

‘It’s time for a rate cut’

Ahead of the Reserve Bank of India’s (RBI) monetary policy review on June 2, Finance Minister Arun Jaitley said the time is right for an interest rate cut. “My views are well-known,” he said, when asked if was time for a cut. “It is.”

A cut in interest rate is expected, as retail inflation was at a four-month low of 4.87 per cent in April. The RBI decides changes in the rate on the basis of the trend in retail inflation.

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