Finance Minister assures investors reforms, says several bills in pipeline

Singapore: Expressing India's commitment to continuing with economic reforms, Finance Minister Arun Jaitley on September 18 said the government has several legislations in the pipeline that will be pursued in coming days. Asserting that reforms are an ongoing process, he assured investors at a function here that the government will continue them to make India an attractive investment destination and a better place to do business.

Jaitley is here to participate in The Singapore Summit and has bilateral meetings with several important government functionaries lined up. "The bankruptcy code is ready and changes to arbitration laws and several other legislations are in the pipeline... For the next few years, we have our agenda full, reforms are an ongoing process," Jaitley said, adding that the legislations which could be taken in the form of the Money Bill will be pursued.

A Money Bill is important as it cannot be blocked by the Rajya Sabha where the ruling NDA does not have a majority. Recalling that there was a time when the experts were talking about dropping India from BRICS (Brazil, Russia, India, China and South Africa), Jaitley said:

"Today, India has become the fastest-growing economy among BRICS." India is no more a nation suffering from policy paralysis and uncertain taxation regime, he said, adding that now-a-days states are vying with each other to attract investment. Moreover, he added, as a net importer, the country has benefited from declining oil prices in the international market. It has helped contain inflation as well as fiscal deficit.

Das said, "We were expecting a modest hike and hence we were prepared for all eventualities. It’s not like we got extra time with the Fed maintaining status quo. We will now continue to focus on macroeconomic stability and taking measures for reforms." He expressed hope that India would witness economic growth of over 7.5 per cent in the current fiscal.

During the first quarter ended June 2015, India GDP grew by 7 per cent. Asked if the US Fed's decision provide any room for RBI to cut policy rates, Das said RBI will take considered view on monetary policy. "The government and RBI met regularly. We met last week for FSDC meeting and had along discussion. But as far as the monetary policy is concerned the RBI will take a considered view," he said.

The government, Jaitley said, has been trying to address the problems of some of the sectors which are going through a bad phase. "There have been some stressed sectors. Steel, power and discoms and sectoral interest of these sectors over the last few months have been specifically addressed," the Minister said.

Refering to the banking sector reforms, the Minister said the government is recapitalising state-owned banks and professionalising their management. "Banking sector is another stressed sector in India and we have started recapitalising and professionalising the banking system. The programme we have laid down... over the next 3-4 years, our banks will be back in shape. It is not a very challenging situation they were passing through... they will get out of that phase," the Minister said. A host of initiatives by the government, Jaitley said, have brought about "a positive environment, which has built up across the country. Now every state is vying for global investment".

The Minister, however, regretted that the key indirect taxation reform Bill -- the Goods and Services Tax (GST)-- could not be pushed through in the last session of Parliament. On the Direct Benefit Transfer (DBT) scheme, the Minister said it has helped in reducing subsidies and rationalising public expenditure.

"Our direct benefit transfer... has actually rationalised a lot of expenditure which was otherwise going waste. Duplications have been done away with, and even in the case of food and fertiliser, the pilot projects are now taking off. Once these projects go through, our saving itself, without an impact on the underprivileged, is going to be reasonable," he added.

The savings on these accounts, Jaitley said, would be diverted to improve irrigation facilities and infrastructure. "The economic returns of investment on irrigation are always the fastest. You build up a huge agriculture buffer and control food prices and you build up a large purchasing power among a majority of Indians. This impacts the manufacturing and services sector," the Minister said.

The government, the Minister said, has been focusing on development of highways, which had slowed "terribly". "Infrastructure had slowed over the years. Rural roads to the national highway programme have picked up in a big way. Highways had slowed down terribly, but it's one of the sectors (in which) in the last 12 months, a lot of public resources have been invested. We put in a lot of budgetary support in modernising the railways," the Minister added.