Davos: Confident of pushing GDP growth higher and continuing the reforms agenda, Finance Minister Arun Jaitley on Saturday said one main reform still work in progress was ‘ease of doing business’ in India and steps were underway on that front.
Mr Jaitley also said the political opposition is unlikely to obstruct the reform process, including on the direct and indirect tax reforms, and he was hopeful about the GST (goods and services tax) getting through as well which is one of the few reforms that has been held up.
He said India’s ranking has improved on ease of doing business in the last one year, but more needs to be done on that front and necessary steps are being undertaken.
Speaking here at ‘The Global Economic Outlook’ session on the last day of the World Economic Forum annual meeting, Mr Jaitley said GST remains very high on the government’s priority while the new bankruptcy law is another major reform measure going ahead.
The panelists said India remains a bright spot in the global economy with a growth rate of over 7 per cent – the highest for any large economy.
To a question on whether all was going well for India and whether there were at all any problems, Mr Jaitley said there are “quite a lot” still and one of the basic problems remains that a large population still lives in poverty.
“To take them out of poverty, we need a sustained high level of growth for a long time. There is an increasing realisation in India that given some favourable conditions, we can grow at a much faster pace,” he said.
Besides global factors, Mr Jaitley said, there have been two successive bad monsoons which have hurt rural demand and, therefore, the growth rate.
“On global situation, oil price has been quite helpful, but shrinkage of exports has been an adversity,” he said.
Mr Jaitley said the government has taken a number of steps and some more are in the pipeline, including some legislative reforms.
“If we get through with that, we can grow at a much faster pace in coming years.”
Asked about his high priority areas, the Finance Minister said, “I think what is extremely important is that all steps that the government has taken have been in one direction. We have not made any mistake.”
“States have also become very competitive and that is also a very good news for India.”
“Also, it is only one or two legislation, including GST, that has been held up, but it is very high on our priority. The direct tax reforms we are undertaking should not have any problems. We are also hopeful of the indirect tax reform. Then, we have new bankruptcy law.”
“One main reform which is still work in progress is ease of doing business in India. We did not have a great track record on that, but our rankings have improved there also. Still, it remains a work in progress and we will continue to take steps on that front,” the minister said.
On technology, Mr Jaitley agreed that the new trends in this area and the ‘fourth industrial revolution’ would indeed benefit India.
“Indians over the last one decade or so took naturally to IT. This was because of energy unleashed within and outside the country.”
“The new Startup India campaign is targeted at that again. We have announced tax breaks and many more benefits and the government will adopt a no-interference approach. These measures would unleash the entrepreneurial energy of Indians in the technology space,” he said.
Mr Jaitley’s co-panelists in the session included International Monetary Fund chief Christine Lagarde, British Chancellor of Exchequer George Osborne, Bank of Japan Governor Haruhiko Kuroda and Tidjane Thiam, CEO of Swiss banking giant Credit Suisse.