India will achieve 8 per cent growth in the current fiscal: Economic Affairs Secretary

Placing his bets on India achieving 8 per cent growth in the current fiscal, Shaktikanta Das is optimistic of the economic activity picking up rapidly if the Constitutional amendment on GST is passed in the upcoming Monsoon Session of the Parliament. Bloomberg TV India caught up with the Economic Affairs Secretary.

The government seems to be on a reform spree. With a good monsoon and hopefully the GST being pushed, are we looking at a pickup in economic activity?

Once the GST is passed, the kind of sentiment it will create and the kind of economic activity it will immediately generate will be momentous. I want to clarify that once the GST is passed, all corporates will have to reengineer and reorient their business. They have to change their entire accounting programmes. They have to train their staff. So there will be a lot of economic activity around that.

And growth is not just about real economy, it is also about sentiments. So once the GST amendment is through, it will give a big boost to the sentiments. So all these put together, I think, we should be able to touch 8 per cent growth in the current fiscal.

How is the road map panning out for the Monetary Policy Committee? Will the members be selected before August?

The Act and necessary amendments are in place now. The draft rules, which we have finalised, will have to be notified. Once it is legally vetted within the next few days, we propose to issue the draft rules relating to the Monetary Policy Committee and that aspect of the RBI Act.

And once the rules are issued and notified, then the selection committee process will get initiated. Our effort is to expedite the whole thing. Whether it is done before the first week of August — that we will have to wait and see. The selection of the three nominees will be decided by the government.

Are we ready for Brexit? Or are there still a little bit of jitters?

There are no jitters. But we are fully alive to the issue arising out of Brexit. Opinion polls in the UK have been behaving like a seesaw. But at the moment, it looks like the vote will be in favour of status quo.

But so far, as we in India are concerned, we are fully prepared for all eventualities. And we have to remember that our central bank has a very robust and strong reserve position — about $360 billion. We also have to remember that in terms of trade import-export, we won’t be impacted much.

The expectation is, if Brexit happens, it will affect the trade between the EU and Britain, which in turn will affect the British economy more, because it is a service-based economy.

Analysts say that if Brexit happens, it will lead to a depreciation of the pound-sterling vis-à-vis the dollar. If that happens, all currencies which are indexed to the dollar could be affected. In fact, in most of the emerging economies there could be some fluctuations in currencies.

But given the fact that India today is a very attractive FDI as well as FPI destination, a lot of forex is coming into India and we have a strong reserve position; the country is appropriately placed to deal with the situation.

So there is no cause for alarm. But at the same time, let me say that the Finance Ministry and the Reserve Bank are keeping a very close watch over the situation.

And whatever measures are required, they will be taken at the appropriate time.

COMMENT NOW