Jaitley said a very large number of reforms have taken place over the last few years and that has helped in restoring the credibility of the Indian economy
Wooing Japanese investors, Finance Minister Arun Jaitley on Tuesday promised more structural and market-oriented reforms as well as stepping up infrastructure spending to accelerate economic growth beyond the current 7.6 per cent.
He also promised to reform the tax structure to make it simpler, predictable and stable.
Speaking at 'The Future of Asia' Conference organised by Nikkei Inc in Tokyo, he said India has been the fastest growing major economy in the last two years despite global slowdown.
“We had a back to back 7.2 per cent and 7.6 per cent growth rate in the last two years. This was notwithstanding the global slowdown which has also adversely impacted the trade in India," said Jaitley, who is on a six-day tour of Japan to attract investments.
The country has been able to perform despite adversities in two consecutive bad monsoons and some stress in the Indian private sector, the finance minister added.
"But then notwithstanding these adversities, a series of structural reforms, coupled with a large amount of enhanced public spending and a FDI, we maintained a reasonably respectable growth rate," he said.
Jaitley said a very large number of reforms have taken place over the last few years. "The objective has been to bring about structural reforms in India, and I think the consistency of that direction has helped in restoring the credibility of the Indian economy," he said.
In the last two years, 101 legislations have been passed in Parliament but there remain some which require a lot more time to build a larger consensus, he said alluding to the Goods and Services Tax (GST) Bill that is stuck in the Rajya Sabha for months now.
He expressed hope the GST Bill will be passed by the Upper House in the ensuing monsoon session of Parliament.
On things to come, he said, "The direction that I have indicated is of more structural reforms, more market-oriented reforms and the future direction of stepping up infrastructure spending, concentrating on rural areas and social security, I think this direction will consistently be maintained."
While India started reforms in 1991, the second generation of reforms were unveiled when the BJP-led government came to power in 2014, he said. "We have opened out more sectors in the economy. While opening out to both international and domestic investments, we removed the unnecessary conditionalities, we eased the process of doing business in India. It is far easier than what it was years ago."
Jaitley said that reforming the taxation system has been a "huge challenge" as at one stage it was perceived to be "a little aggressive."
"A series of direct tax reforms currently are work in progress and we are currently moving towards a regime which would be absolutely simpler, predictable and far more stable; a regime which will bring down India's corporate taxation level to about 25 per cent," he said.
The government, he said, was currently in the process of reforming the indirect taxation system through introduction of the GST, which will replace an array of state levies. "One House of Parliament has already passed it, it is pending before the other House," he said.
Also, the allocation of resources has been made far simpler and transparent through a market mechanism.
"Entry into business has become easier, conduct of business has become easier and with the passage of Bankruptcy Insolvency code, exit from businesses also has become easier," he said.
Underscoring investment opportunities for foreign investors and pension funds, the Finance Minister said India has an infrastructure deficit.
"To cover up for that deficit we are working overtime. This year... we will be constructing 10,000 km of National Highways, almost at a pace of 30-km a day," he said.
Also, the railways modernisation programme is on and the government is focussing on attracting private investments including FDI in railway infrastructure, Jaitley said adding that as many as 400 railway stations are to be modernised to make them hub of commercial activities.
"We have about 70 functional airports, 25 more are being added this year... More sea ports, more power supply and renewable energy.. that seems to be the emphasis as far as the future is concerned. These infrastructure additions that we are making is certainly going to be one of the main drivers of the Indian economy," he said.
Stating that India clocked a growth rate of 7.6 per cent last year despite a drought and global slowdown, Jaitley said this year the monsoon is expected to be a good one.
"With continued structural reforms, improvement in urban demand and monsoon also adding to the rural demand, hopefully we would maintain this growth rate, may improve upon it somewhat," he said.
He said that Asia would grow much faster than the rest of the developed world and "the decades to come would probably be the Asia's decade with India playing a very important role in it."
Photograph: Courtesy, Arun Jaitley/Twitter