The Narendra Modi government has addressed some of India's most pressing economic problems and reduced the cost of doing business, said finance minister Arun Jaitley on the sidelines of the annual Spring meeting of the International Monetary Fund and the World Bank.
He said that the government had achieved all of that in less than a year since coming to power last May. "India is one of the bright spots in the economy because of the reforms we are undertaking and its rising growth prospects," Jaitley said. "I think it is fair to say that fundamentally we have restored faith in government and its ability to push the Indian economy toward the path of sustained double-digit growth which is our medium-term goal."
Jaitley compared the situation when Modi came to power and how it has changed over the course of the last ten months. "Till late 2013, India was teetering on the edge of a macro-economic crisis - inflation was at double-digits, the current account deficit at four per cent of the GDP, growth was decelerating sharply and India was reeking with the odour of corruption scandals and weak governance."
"In less than a year after coming to power and because of the steps being taken by the new government, inflation is down to five per cent, current account to less than one per cent of the GDP. Growth has started to accelerate to over 7.5 per cent and foreign inflows are at over USD 50 billion," he said.
"All petroleum-related energy prices have been deregulated, the world's largest problem of financial inclusion successfully implemented, agreement has been secured on implementing goods and services tax (GST) and bills have been passed to reform the coal and mining sectors and open up the insurance sector to FDI," he said.
The annual budget reinvigorates growth by emphasizing public investment while maintaining fiscal discipline and protecting the vulnerable; direct benefit transfers have been implemented based on what the Economic Survey has called the JAM number trinity, he added.
Jaitley said the word "scandal" had ceased to be part of the popular discourse because major resources like spectrum and coal had been transparently auctioned and an onerous land acquisition bill is being rectified to reduce the costs of doing business.
But he accepted that the steps taken by the government were initial reforms that should lead to bolder measures. "True, this is the beginning of a long process and we have a lot more to do which we will do," Jaitley said.
(With agency inputs)