Here's what Arun Jaitley has said about India's growth potential, rupee, GST

Finance Minister Arun Jaitley, while speaking at an event in New Delhi, touched upon various subjects like growth, India’s stature in the global economy, rupee and GST. 

Here’s what he said about each of them:

On government spending for growth

Jaitley said that India Inc wants the government to spend more, but economists remain sharply divided on the issue. He said, public investment maybe key in the current economic situation, but the economy has to be put on a sounder platform. 

In the run up to the upcoming Union Budget, he said, “any budget has to weigh areas of weakness and then pitch in that direction.

India’s growth

Jaitley said that India is one of the few economies that survived crises in 2001, 2008 and now 2015. At a time when many economies are not doing too well in the world, and amidst the global slowdown, Jaitley said that “when a country indicates over 7.5% growth, we stand out and we feel happy about this”.

However, he also said that 7% growth isn’t India’s optimum growth rate. “We have a lot going for us. We have the potential to grow. We should be able to achieve 8% growth in FY17,” he added. 

“We must carry on structural reforms put in place. We must grow at rate 1.5 % more than we are,” he said. 

Jaitley said that there is a need to make every sector strong for India’s growth. “We need a strong corporate and agricultural sector,” he said. For this, there is a “need (for) a sound policy that helps both corporate and agriculture sector.

There is a need to concentrate on infrastructure development, agricultural productivity and manufacturing, Jaitley said. We have our potential right in front of us, he added. 

On the rupee’s weakness

The rupee has recently shrunk to 68 to a dollar, a level not seen since the Modi government came into power. However, Jaitley said that the word free fall cannot be used to describe the rupee as it has weakened the least. 

Globally, most Asian market currencies are at multi-year lows on the back of the slowdown in the global economy along with China’s growth slowing down. A currency war has ensued since China first devalued its currency early last year. 

“Only when the Chinese devaluation took place last year, the rupee started shrinking,” he said.

However, against most currencies it hasn’t shrunk, he added. “The rupee is not in a free fall mode. It will find its own level.”

“Global markets have been very choppy and will also impact on currencies”, he said. “It is expected to have ripples across global markets”

On GST

Answering a question on GST, Jaitley said that he didn’t have any discussion with Sonia Gandhi about GST at the Rashtrapati Bhavan. 

However, he also added that except Congress, every political party is now actively supporting GST. He said that even all the states, including those led by the Congress are in support of GST. 

He said that passing good laws by consensus should be our preference, however, now “Congress stands along without its allies,” he added.