Delhi poll defeat will not slow down reforms: Jaitley

Two days after heavy defeat in the Delhi Assembly polls, Finance Minister Arun Jaitley has said that this result will not affect the reform process. This brought cheer in the stock market where both benchmark indices ended with handsome gains.

“Four elections have been won and one has not been won is absolutely no ground for believing that there will be any slowdown on the path which we have undertaken,” he said while addressing a joint press conference with US Treasury Secretary Jacob J Lew on Thursday. This was the first formal response from the Modi Government after Delhi Assembly poll ended with just 3 seats for the BJP and whopping 67 seats for the Aam Aadmi Party.

He also said that the Government is determined to go ahead on the path of economic reforms. “We believe the kind of reforms we have undertaken are certainly going to bring in investment, generate jobs, improve the quality of life of people and also help us in alleviating poverty level. It is only this that will give strength to the Indian economy to even being in a position to expand a large number of poverty alleviation programmes and social schemes,” he said.

Combined with news of truce in Ukraine, comments from Jaitley took BSE Sensex to 28,805 with a gain of over 273 points over Wednesday's close, while the NSE Nifty ended at 8,712, a gain of over 55 points. Market players believe that with expectation of more reforms in the Budget, higher foreign fund flow will take the market to new highs in the coming days.

Dialogue with US

Earlier, talking about issues taken up during the 5th Indo-US Economic and Financial Partnership meeting, Jaitley said that both sides discussed the state of the economy as far as US and India is concerned. There were detailed discussions on the financial sector, the macroeconomic situation in both the countries, the taxation, the banking and problems facing the world with regard to funding of terrorism.

“We have a great interest in attracting global investment in India. This investment is targeted particularly in the infrastructure sector; also we need a lot of investment in manufacturing. And the steps we are taking to ease the process of doing business in India also came up for discussion today,” he said.

US ready to partner in whatever way it can

Appreciating Modi Government’s effort on reforms to facilitate investment in India's infrastructure sector, Lew said that both countries together can do more to help ensure widely shared growth, promote job creation and strengthen demand. Still, he felt that additional reforms are necessary and an increase in public investment combined with a more open investment climate and a deeper financial sector would help attract private infrastructure investment.

“At the same time external balances have improved, inflation has moderated and the Government has signalled its commitment to strengthen fiscal position. As India makes progress on economic reform programme and follows through on the difficult decisions reform requires, the US stands ready to be your partner in whatever way we can,” he assured.

He also said that both countries are making the hard choices necessary to raise growth and employment for populations. “In India, the Modi government has taken steps to reduce fuel subsidies, allowing the government to continue reducing deficits while providing the fiscal space to make investments that will boost growth and raise employment,” he mentioned.

Highlighting, the UIDAI (Unique Identification Authority of India) initiative, he said that this underscores how increasing active participation in economy helps promote growth and prosperity. “Enrolling 800 million people is remarkable. India's rapid and inclusive financial inclusion campaign will provide critical services by enabling a DBT (Direct Benefit Transfer) and improving the accountability and efficiency of Indian programmes,” he said.

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