Finance Minister Arun Jaitley on Tuesday said India needs a strong and decisive leadership at the Centre to continue on its high growth path and take swift decisions. A weak leadership could not have handled the IL&FS issue the way the present government did, he said.
“A crisis in the making was handled with swiftness,” Jaitley said, addressing the 98th annual session of Assocham. He cautioned that India doesn ot need an ‘unstable coalition’ at the Centre with individuals, who lack understanding of policies, at the helm. General elections are due in April-May next year.
“India needs a government and leadership which have absolute clarity about the direction so that this unique position which IMF refers to as a sweet spot in the world we continue to occupy for next two decades. If you are able to do that, we can get rid of the curse of poverty and in our lifetime probably see India as a developed country,” Jaitley said. India’s economy grew by 6.7% in FY18 and it expanded by 8.2% in the April-June quarter of FY19.
Pointing to headwinds to economic growth, Jaitley said global oil prices have risen on account of “artificial shortages” and being a net buyer of oil, any rise in global crude prices would adversely impact the country. “Therefore we have to face that challenge by making our economy so resilient itself that we have the capacity to bear that challenge,” the minister added.
On Monday, Prime Minister Narendra Modi appealed to oil producing countries and global energy giants to review the ‘payment terms’ with India so that the rupee, which has fallen by nearly 14% in the last one year, gets some support. Although a government statement did not spell out what the payment terms sought by Modi were, sources said he meant greater facility for Indian crude importers to pay their overseas suppliers in rupee rather than dollar.
Rising crude prices could derail the fiscal consolidation path, lead to a rise in current account deficit as well as inflation, posing problems for the government ahead of several state assembly elections and general election. Jaitley hoped that “such transient effects will not be everlasting.”
Listing out several reforms such as Insolvency & Bankruptcy Code, the minister expressed hope that India’s rank in ease of doing business, which improved from 140 to 100 in three years of the Modi government, would show substantial improvement in the next edition of the data to be published by the World Bank.
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