Normal monsoon, steady crude prices can push India’s growth to over 8% in FY19: Jaitley

The Indian economy’s growth can canter into an 8 percent-plus growth track if crude oil prices stay within manageable limits and the monsoon rains turn out to be normal this year, finance minister Arun Jaitley said.

“Some indicators, which are known as green shoots in the language of business, such as business confidence, PMI (purchase managers’ index), core (infrastructure) sector growth, are all good. We need to see what happens next,” Jaitley told News 18 Network in an exclusive interview.

“Monsoon is a factor for agricultural demand,” he said. “I want oil prices to definitely not go higher than it already is.”

On being asked if India’s real or inflation-adjusted GDP growth will exceed 8 percent if oil prices remain the same and if monsoon turns out to be good in the coming summer season, Jaitley said, “If such situations persist.”

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The Economic Survey 2017-18, tabled in Parliament last week, projected that India will grow at 7 to 7.5 percent in 2018-19, with the economy poised to move into a faster lane, swiftly recovering from the disorderly effects of demonetisation and the rollout of goods and services tax (GST).

It, however, cautioned about rising oil prices and identified agriculture as a focus area for reforms.

Jaitley said that India can achieve double digit growth rates under two conditions — if the revenue levels rise, pushing up spending capacity, and if there is a sustained global boom. “If economies are growing moderately across the world, then will be hard (to achieve double digit growth),” he said.

“I think, if we reach 8 percent, it will be a good achievement, as no other country is able to even touch 7 percent. If we cross 8 percent, I will be very satisfied with myself,” the finance minister said. “The GDP growth rate should be analysed in the given global conditions.”

There are budding signs of recovery in the world economy, which is projected to grow 3.9 percent in 2018. “A little aggression has come. If there is a 3.9 percent growth in the world economy, then the emerging markets will grow faster. And among them, India will grow the fastest,” Jaitley said.

The finance minister also pointed out that India’s export sector has recovered smartly and is now growing at 14-15 percent, signalling a revival in global demand.

The Economic Survey pegged India’s economy to grow at 6.75 percent in 2017-18, buffeted by the twin disruptions of GST and demonetisation.

“GDP growth never rises by 5 percentage points. Every economy has a range. If you look at previous years, the economy has grown at even (in the range) of about 5 percent. In the first year of our government, GDP grew at 7.1 percent, followed by 8.2 percent, 7.1 percent, and this year, since there has been an effect of reforms of demonetisation and the GST we expect to grow at 6.7-6.8 percent,” Jaitley said.moneycontrol