Subdued global economy and moderate private sector investment will continue to pose challenge in the next year, finance minister Arun Jaitley said.
“As I speak at the end of the year, the current engines, which are driving the economy will continue, and beyond that the three downsides are global economy, a moderate private sector and agriculture,” he said here.
The finance ministry in its mid-year economic analysis earlier this month lowered the GDP growth forecast to 7-7.5% from 8.1-8.5% projected in the Economic Survey.
“If we had good agriculture then we had been close to the kind of figure (chief economic adviser) Arvind Subramanian had been talking about because not only agriculture adds to GDP, but spiral effect also takes place,” he said.
Stressing that economy requires multiple engines of growth, Jaitley said the global tail winds can be an engine, which unfortunately are not there. “A very buoyant private sector can be an engine, which is not. A bumper agriculture can be an engine, which it is not. Therefore, you have to rely on other engines, which are public investment, FDI, private investment, IT, telecom and then some consumptions,” he said.
On the positive side, he said that subdued prices of oil would continue to propel growth. “I think the silver lining in this for India is the oil prices and this is enabling us to fund through public investment ,” he said.
Meanwhile, hitting back at Congress party’s Trinity remarks, Jaitley said Goods and Services Tax (GST) will happen. “Congress has said even Trinity of Gods cannot make GST happen soon. God’s don’t vote in Parliament, but MPs do. Shrinking strength of Congress in the Rajya Sabha can make it happen,” he said.
Congress leader Anand Sharma had recently said the April 1, 2016 deadline for rolling out GST would not be met “even if the trinity of Gods - Brahma, Vishnu and Mahesh - descend on earth” because the government was yet to complete preparatory work for the new indirect tax regime.