Union finance minister Arun Jaitley on Monday said that country’s economic growth is expected to exceed 7.3% in the current fiscal year adding that the government would will try to convince opposition parties to pass a blocked tax reform.
“The Indian economy is expected to grow better than 7.3% - the level achieved last fiscal year - and even at a higher level next year,” Jaitley told investors at an Arab-India Economic Forum meeting in Dubai.
Economic growth, Jaitley said, will come despite weakness in rural demand due to poor rainfall in the last two years. A drought has also caused shortages that have led to a spike in prices of pulses and vegetables.
Country’s retail inflation surged to a four-month high in October and industrial production grew at a slower-than-expected pace in September, latest government data shows.
In a bid to speed up growth, the government last week eased foreign direct investment (FDI) norms in 15 major sectors, including mining, defence and civil aviation.
But foreign and domestic investors are worried the government’s reform agenda could face renewed political opposition after Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) lost assembly elections held in Bihar.
In an apparent bid to calm such fears, Jaitley said he would persuade opposition parties to pass a business-friendly goods and services tax, that could add up to 2 percentage points to gross domestic product but is blocked in Parliament.
“To convince the opposition is top priority,” Jaitley said.