Finance minister Arun Jaitley on Sunday expressed optimism that India could clock 8% GDP growth if key reforms, including goods and service tax (GST) bill, smart cities and higher spending on infrastructure development, were implemented. Tax revenues were also expected to be higher this year, he added.
Indirect tax revenues rose 37.5% to Rs 1.54 lakh crore during April-June, data released by the finance ministry showed.
“The silver lining in that the revenue situation may be more comfortable this year than last year. Therefore, with the reforms measures ongoing, some more significant changes like GST in the pipeline, increased infrastructural spending this year, emphasis on smart cities when all these initiatives get down to the field, then India’s aspiration to cross that 8 % hub and get on to the 8-10% growth targets, maybe something, which is not completely out of sight… something, which may be eminently achievable,” he said during a seminar on mitigating agrarian distress and enhancing farm incomes organised by the National Bank for Agriculture and Rural Development (NABARD) in Mumbai.
He also said the monsoon is progressing well and there are expectations that “rain gods will be kinder” this year, which would result in higher production of pulses and other items.
Monsoon was above normal in June with 25% excess rainfall despite a late arrival and a drought-like prediction, and the rest of the monsoon may also be good, he added.
The finance minister warned that though India was being looked upon as a bright spot when the the world was passing through “troubled times,” it was necessary to take lessons from the Greek crisis and maintain fiscal prudence. “We have lessons from Greece to learn today and the big message is that countries should learn to spend within their means. If they didn’t do that, you would have an unusual crisis confronting you. India is well tracked on the roadmap, where our fiscal deficit and current account deficit all broadly coming under control, inflation is under control,” he said.
Expressing concerns about the growth rate in the agriculture sector, where productivity levels were still reasonably low, Jaitley said: “We are fairly clear about the fact that a large part of investment will have to go into agriculture, mitigating this rural distress and indebtedness of the farmer.”
The government has announced various measures for the agriculture sector, including an investment of Rs 50,000 crore over the next five years for the Pradhan Mantri Kisan Sichai Yojana, and the finance minister said it was only the beginning.