Creating jobs a priority says finiance minister. Arun Jaitley
New Delhi: Finance minister Arun Jaitley said on Sunday that reviving the growth momentum, containing inflation and altering the pattern of growth to gainful employment is an overriding priority. The finance minister promised to uphold fiscal discipline, despite pressure on public finances from a slow economic growth and low tax collection. Mr Jaitley pointed out that the new governmnet has come at a time when growth is slowing down and inflation is rising.
Mr Jaitley’s statement came even as RBI governor Raghuram Rajan met with the Prime Minister Narendra Modi on Sunday ahead of the bi-monthly policy review on June 3. All eyes are on the monetary policy review to see how interest rates will be set up in the new regime. Mr Jaitley said that there is a need to boost domestic low-cost manufacturing and hasten the pace of reforms. “Price stability and growth are inter-twined but may require a different strategy,” said the finance minister in a post on the social media.
Mr Jaitley noted that to pull the country out of the present economic situation, will involve fiscal rectitude as combination of monetary and fiscal policy. He said that slower GDP growth will imply lower tax buoyancy and higher fiscal deficit.
Finance minister noted that the country must move towards an era of fiscal discipline where “we can reduce the fiscal deficit, contain inflation and improve upon our growth rates.” He said that India must prepare itself for this (fiscal discipline). “We must commit ourselves to this discipline in order to strengthen the Indian economy which can improve the quality of life of every Indian and pull out the deprived ones from the state of poverty. Short term (fiscal) disciplining till we reverse the present trend will give us long term benefits,” said Mr Jaitley.
He said that the BJP led NDA government has inherited an economy whose GDP has grown by sub 5 per cent for two years in a row. Finance minister noted that mining and quarrying sectors have gained a negative growth trend. “The manufacturing sector has had an abysmal performance last year. The investment cycle has been disturbed. The negative sentiment has affected trade, hotels and transportation sectors,” said Mr Jaitley.