The government would prefer to use buoyant tax receipts to fund extra infrastructure spending than to slash its borrowing target for the current fiscal year, finance minister Arun Jaitley told Reuters in an interview on Tuesday. Jaitley also said he would prefer to stick to the fiscal deficit target of 3.9% of gross domestic product (GDP) for 2015-16.
The Centre is ready to discuss all issues with the Opposition to pass a key amendment in the winter session of Parliament, which would pave the way for a new nationwide goods and services tax (GST), he added. “Without compromising on the architecture itself, and keeping a general consensus between states and the Centre in mind, I think a discussion is reasonably possible.”
By unifying Asia’s third-largest economy into a single market the GST would add as much as two percentage points to the economy, some have estimated.
Courting deep-pocketed sovereign wealth funds in West Asia, Jaitley said he expected the Abu Dhabi Investment Authority to start investing in India soon and eventually commit up to $75 billion.
“Long-term investors want to ensure predictability, growth and returns. We also need to have legal structures in place,” Jaitley said. “India has now proved to the world its commitment to reforms. India is growing faster than other emerging markets. There is a stability and predictability of the policy regime.”
India is the fastest-growing major economy in the world, outpacing even China. Jaitley said he hoped growth would exceed 7.3% in 2015-16, and had the potential to reach 8-10%.
The government seeks faster growth to create work for the one million youngsters who enter the workforce every month.