India cannot function with fragile coalitions in future: Arun Jaitley

With the general elections expected to take place within the next six months, Union Finance Minister Arun Jaitley asserted that going forward, India cannot afford to have "fragile coalitions."

Addressing an annual gathering of the Federation of Federation of Indian Chambers of Commerce and Industry (FICCI) on Friday, Jaitley noted that the need of the hour was to formulate policies that have clarity, directional stability and decisive leadership, and establish a market economy with social consciousness for ensuring equitable growth.

"The next six months would see a rise in political rhetoric with voices which may not be the expression of the real intent. The need of the hour is continuation of sound policies as against transient populism. The immediate target should be one that spells out the recipe for the next two decades; for an India where further reforms would be the only constant for aspirational people whose attitude is for change and desire for a better quality of life," he said while addressing members of the industry body.

Jaitley further said that if the current growth rate and India's global position is retained, the country will be able to go beyond growth rate of 7-8 per cent. In order to achieve this, however, Jaitley said it is important to identify several unreformed sectors such as state road transportation, railways, dealing with urbanisation, focusing on science and technology and research.

"India has done extremely well in infrastructure areas such as aviation and ports and it must be ensured that these success stories are not converted into challenges for the economy," he added.

Amid reports of Urjit Patel stepping down as the Reserve Bank of India (RBI) governor over the central bank's alleged stifled autonomy, Jaitley clarified that the government was in no way trying to interfere in the autonomy of the central bank.

He further said he was unable to perceive how an elected, sovereign government which flags off issues of credit and liquidity could be construed as infringing on the autonomy of the institution.

"Autonomy is not synonymous with isolationism, and therefore, bringing issues of concern to the notice of the central bank should not be regarded as a hindrance to the autonomy of the RBI," Jaitley asserted.

A tiff between the RBI and the Centre allegedly ensued after RBI deputy Governor Viral Acharya earlier this year stressed on the need to ensure the central bank's independence.

On Thursday, former chief economic advisor Arvind Subramanian had opined that creative tension between the RBI and the Centre should exist in line with the autonomy of the central bank.

"We want autonomy and independence but along with communication and cooperation because both parts of the government (i.e. RBI and government) have to work together as many of their objectives are common. There will be some objectives which are different and that's why we created RBI. They will never agree, they should never agree, there has to be a creative tension," he had said.