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5.7% growth shows economy is recovering; fiscal deficit target of 4.1% achievable: Arun Jaitley

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Finance minister Arun Jaitley, in a press conference on Saturday, presented what seemed like a 100-day report card for the Narendra Modi government after it came into power. It said the 5.7% GDP growth was already looking encouraging and the international investors are also looking at India with some interest and curiosity. He said, the target of 4.1% for the fiscal deficit was one set by the previous government and he had accepted it as a challenge. However, now it seemed a more attainable target. He said inflation, fiscal deficit remained challenges for the government that it was working on. 

Here are the major comments Arun Jaitley made on the economy: 

On the GDP growth and general outlook for the economy

  • Investor had lost hope in the economy. Now the international investors are looking at us with curiosity. 
  • India is changing for the better; look for silver lining instead of gloom.
  • GDP figures tell us that the economy is on path of recovery. The long term impact of all initiatives are setting in and the impact in the coming quarters of the decisions the government has taken will be much larger
  • The general expectation is that the economy will continue to grow at 5.5%
  • Both manufacturing and services sector are looking up
  • Lok Sabha poll results have been encouraging for the economy
  • We have seen by and large a moderation of inflation.
  • We have also allayed fears on retrospective taxation.
  • The government is very clear whether it is a social sector scheme, or any other significant decisions, we have been moving in the right direction. I am optimistic that as more decisions come in this direction, we will be able to help economy to grow little faster.

On disinvestment and inflation

  • The disinvestment target is on its path and the targets will be met with in the rest of the year
  • Food Inflation is generally high at this time of the year especially with prices of fruits and vegetables.
  • The fears of a jittery monsoons are not yet allayed.
  • There is sufficient food stock in the country, no need to worry despite low monsoon
  • Oil prices have moderated, which is why, oil companies have passed price benefits to consumers. This will help the inflation numbers
     

On pending Bills and reforms

  • We will not have to go to the join session for the passing of the Insurance Bill. I am reasonably confident because the political parties who had mooted the idea in the past cannot have any serious reservation against it. Since the parliament wants it to be revisited by select committee, we agreed to it.
  • For the Land Acquisition Bill, I have spoken to the chief minister and finance minister of West Bengal as well. We will discuss with major parties to see if some flexibility(slight enlargement of exemptions)can be available
  • Goods and services tax is at the top of government agenda. There too we will see if more flexibility is possible, by which I mean slight enlargement of exceptions.

On high fiscal deficit

  • Fiscal deficit in the first quarter tends to be high due to lower tax collections, including the fact that advanced taxes have not started coming in. You are also burdened with refunds of the last quarter of the previous year. A combination of these factors have pushed FD up. Over the year it will even out.
  • When I adopted the challenge of 4.1% fiscal deficit, I said it was a daunting task and I accept the challenge. But now it seems achievable.

On Jan Dhan Yojana

  • ​The target was to open 1 crore accounts in the first day. last evening the number stood at 1.84 crore. Today that number has gone up to 2.14 crore till noon
  • Whole of yesterday and today enrollments have continued despite celebrations throughout the country. 
  • I complement the banks and department of financial services for this achievement.

On coal blocks allocation scam

  • Supreme Court judgement on coal block allocation will move the system towards a fairer system of allocation of resources​
  • We cannot allow the fate of the coal blocks to hang in the air. They need to be utilised for what coal is utilised for.
  • So whether existing allottees use the coal or fresh allotment is made, we have to wait for the SC decision to know that.
  • But I cannot set a timeline for the court

 

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