Singapore: India’s economic slowdown has bottomed out and now it should start moving upwards after recovering from the “temporary blip” seen during the recent structural changes, Finance Minister ArunJaitley said on Thursday.
Addressing investors at the Morgan Stanley annual conference here on ‘India: Structural Reforms and Growth Path Ahead’, Jaitley talked about the “massive” economic reforms undertaken by India.
He acknowledged that there was a “temporary blip” as a result of structural changes that were initiated by the government.
“I think the bottoming out of the economy is complete and now it should start moving upwards. The global economy is also moving up,” said Jaitly.
As part of the summit, Jaitley met the senior management of Morgan Stanley and addressed a gathering of senior fund managers and key financial institutional investors.
“How do I see the economy moving our basic parametres are quite stable. And we grew between 7-8 per cent over the last three years, he said. “Therefore, we need over the next, at least, a decade, if not more, significantly higher growth rates in order to go ahead with expansion plan of the Indian economy, Jaitley said. The finance minister also assured investors of a strong banking sector in India. “The combination of the IT scheme and now the large-scale recapitalisation we have announced should be put into motion expeditiously,” he said.
The combination of these two steps are likely to improve the capacity of the banks, and even lend their surplus, particularly to the small and medium-scale industries which need those funds in abundance because they are the ones that are the big job creators and keep the Indian economy going, he elaborated.
He also clarified the often over-stated labour issues, saying these were no longer there as the negative environment of disruption of industrial activity is long over.
He said the labour laws are being fortified by taking the unions into consultation, and there has not been any significant labour resistance in recent times, whether it is disinvestment or privatisation, he said.
“We havent encountered trade union resistance as that is concerned,” he pointed out, adding that there are already various kinds of reforms.
Responding to questions from investors, he said among the privatisation of public sector units (PSUs), Air India is in a very advanced stage while some of the PSUs will be kept as they are. The state enterprises in the oil and some in the power sectors will be kept as PSUs.
“But there are many which will be privatised, he added, pointing to a list prepared by the NITI Aayog. “In any case, we are going with the divestment programme very actively,said the minister.
He also gave the investors an update on the ongoing business reforms, and called for investments for changing the landscape of India with an accelerated pace.
Jaitley who is on a two-day visit to Singapore, held meetings with Singapore ministers and investors.
‘Three key reforms have improved transparency’
Finance Minister ArunJaitley has said three key structural reforms — Aadhaar, Demonetisation and GST — have enhanced transparency and helped in transition from cash to less cash economy.
Jaitley made this comment before a gathering of investors while highlighting various achievements like ease of doing business ranking by the World Bank.
“The three key structural reforms implemented by the present government in recent years vizAadhaar, Demonetisation and GST have brought transparency and efficiency in governance and helped in transition from cash to less cash economy and from informal to formal economy,” he said in address to investors here yesterday.
To provide further impetus to the economy, the present government has implemented a slew of economic reforms one after the other, including the roll out of the game changing tax reform Goods and Services Tax (GST) from July 1, 2017; introduction of Insolvency and Bankruptcy Code (IBC) and the re-capitalisation package for the banks, he said.
Recapitalisation will help to redress the twin balance sheet problem and revive private investment, he added.
The finance minister also spoke about the major initiatives undertaken by the present government, including crackdown against black money through demonetisation and other follow-up measures, and major changes in the Foreign Direct Investment (FDI) Policy regime with an aim to make it more liberal and investor friendly.
Various initiatives taken by the present government in the last three years resulted in India jumping in World Bank’s “Ease of Doing Business” Index from 142 in 2014 to 100 in October 2017, he added.
Jaitley, who is on two-day visit, met the CEO and Senior officials of sovereign wealth fund of Singapore GIC and discussed investment opportunities across multiple sectors in India, including National Investment and Infrastructure (NIIF).
Accompanying Economic Affairs Secretary S C Garg had a bilateral meeting with Tan Ching Yee, Permanent Secretary, Ministry of Finance, Government of Singapore and discussed issues relating to the Host country’s concerns on the matters of Double Tax Avoidance Agreement (DTAA).
During an investors’ conference, Garg responded to a number of questions relating to Double Tax Avoidance Agreement (DTAA) with Singapore, currency stability, fiscal deficit, India s sovereign rating, supply chain and issues on power sector, among others.
