'India must carry on the structural reforms to once again defy the global slowdown'
India can stand out in the gloomy global economic situation with headwinds from China and the US if it continues with ‘reforms and responsible economic planning’, Finance Minister Arun Jaitley on Friday.
He expressed confidence that the country will prove its resilience.
There is a mood of concern among the global leaders and other participants at the World Economic Forum Annual Meeting in Davos, Jaitley said.
India must carry on the structural reforms to once again defy the global slowdown, he added.
"And if India continues its reforms and responsible economic planning, we can stand out.
"Indian economy in 2001, 2008 and 2015 has shown resilience to defy global slowdown and crisis.
"Today, we are better equipped to face that situation and show the resilience," Jaitley told PTI in an interview.
It is absolutely clear in meetings of the global economic leaders in Davos that "the mood is one of concern because global economy is facing a lot of uncertainty", he said.
"A lot of challenges have surfaced simultaneously.
"There is worry over China, though Chinese themselves have said that it is no longer possible for China to have a double digit growth and that they consider 7 per cent growth as their new normal.
“But there is still a lot of global worry about China," he noted.
The Finance Minister said the oil, metals and commodity producing nations are all facing serious challenges and there is a concern that the fourth quarter in the US may not be producing best results.
These issues have led to global uncertainty and that is also leading to re-adjustment of investments, he said.
"Money is being withdrawn from several markets and getting invested elsewhere.
"Investors are being cautious and averse to risk in an environment of uncertainty.
"Stock markets across the world have been adversely impacted.
“They are globally integrated and the currencies in most parts of the world have also been adversely impacted.
“In fact the impact on currency has been the least in case of India," he said.
In the last few days, the Indian rupee has been falling on foreign fund outflows.
Touching a 29-month low against the US dollar, it closed at 68.02 on Thursday.
Expressing confidence that India would show its resilience, Jaitley said: "The oil and commodity price regime benefits us.
"We are not a part of China's production or distribution chain and so the Chinese slowdown does not impact us (directly)".
Jaitley is accompanied at the WEF by a big delegation of Indian business leaders, including members of the industry body Confederation of Indian Industry.
Most business leaders from India shared Jaitley's views that India must continue on its reform path and seize the opportunity given to it as the bright spot of the global economy.
Confederation of Indian Industry Secretary General Chandrajeet Banerjee, who is also participating in the WEF meetings, said that there was a lot of hope about India at WEF meeting in Davos last year and the global leaders this year are doing some sort of a cross-check on the same.
"On the global side, there are a lot of worries with slowdown in China and plunge in stock markets and commodity prices and if there is a bright spot, it is surely India.
"Leaders here are appreciating the reforms undertaken by India and also the emergence of cooperative and competitive federalism in the country," he added.
Image: Finance Minister Arun Jaitley gestures while speaking at a conference in New Delhi. Photograph: Adnan Abidi/Files/Reuters