Washington: Indian economy will grow at a rate of 7.5% this fiscal, up from 7.1% in the previous year, and remains resilient with low inflation, fiscal prudence and low deficit, finance minister Arun Jaitley said.
Participating in G-20 finance ministers’ and central bank governors’ meeting, he said emerging economies have become increasingly important in driving global growth, accounting for more than 75% of global expansion.
Among emerging economies, “India has been a major driver of global economic growth with an expected growth of 7.5 per cent for 2017-18 against 7.1 per cent in 2016-17”, an official statement quoted him as saying.
India’s growth, he said, remains resilient with low inflation, fiscal prudence and low current account deficit (CAD), talking about robust structural reform measures. Addressing the meeting yesterday, Jaitley said India is on course to introduce the goods and services tax (GST) from July this year. GST, he said, will eliminate the multiplicity of taxes and make India a single common market. As per International Monetary Fund (IMF) projections, India’s medium-term growth is poised to go above 8%, Jaitley said.
The finance minister said demonetisation will push the Indian economy to a less-cash trajectory, increase tax compliance and reduce threats from counterfeit currency, which acts as a source of terror funding. “These and many more multi-faceted reforms are expected to ensure India can withstand volatility of the global economy as well as ensure an upward growth trajectory,” he asserted.
Jaitley is on an official tour to the US to attend the spring meetings of the IMF and the World Bank and other associated interactions. He is accompanied by Reserve Bank of India governor Urjit Patel, economic affairs secretary Shaktikanta Das and chief economic adviser Arvind Subramanian.
Separately participating in the Development Committee Restricted Lunch Session on the theme of ‘Inequality’, Jaitley said rich nations still have a big responsibility and obligation to use their resources to support multilateralism. Also, they need to make institutions like the World Bank strong to be able to fund policies and programmes for growth and development of poorer nations.
India, according to Jaitley, has significantly stepped up investment in electricity, roads, financial access and housing for the poor and the government has taken a number of steps to ensure inclusive growth. It is using technological innovations in a big way for better targeting of government services, he said.