New Delhi: The Indian economy has the potential to achieve a GDP growth rate of more than 7-8% in view of policy changes, accompanied by a supportive global environment, said finance minister Arun Jaitley on Tuesday.
Addressing the India-Korea Business Summit, he observed that, over the next 10-20 years, India will continue to remain one of the fastest growing economies in the world. “India has demonstrated in the last few years that it has, even in a global environment of adversity, a potential to self correct itself, to continue to take difficult decisions if necessary and maintain a high growth trajectory," Jaitley said.
He said the country has been able to blend its economic decisions along with political acceptability to the extent that “there is now a huge support, almost bordering on impatience, where people want India to reform and grow much faster".
According to Jaitley, most people in India believe that a 7-8% GDP growth rate is an absolute normal for the country but the real potential of India is to beat that. “Therefore with policy changes accompanied by a supportive global environment, India perhaps has the potential to achieve a little more than that," said the minister.
He said the Indian economy in the last few years has become very open, it is integrated globally, it invites investments in most sectors and has made its procedures for investment extremely simple. Jaitley said the government’s decision-making has made doing business in India much easier and whatever challenges and difficulties do arise, there is an extensive debate in the country as to why procedures must be further simplified and a combined national effort to move in that direction.
“It’s a rule based decision making where governmental discretions based on individual cases have been virtually eliminated," Jaitley said on the country’s regime. He said the government has been able to unify taxes and bring about a relatively simpler tax structure and for international investors, indirect tax structures have become extremely investor friendly.
In an apparent reference to retrospective taxation, Jaitley said: “Whatever misgivings we had about our direct tax structures in the past including some erroneous decisions which governments have taken, we have completely eliminated those fears and added more predictability and stability as far as taxation is concerned."
He said the government is consciously encouraging some sectors. “The manufacturing sector is an area where India still has to achieve its best and therefore we believe that in the next decade or two, this is a sector which is going to expand very substantially and most policies therefore are now conducive to domestic manufacturing," said the minister. He said there is a lot of potential for companies wanting to invest in infrastructure in India.