New Delhi: Pledging to continue structural reforms to accelerate growth, Finance Minister Arun Jaitley on Saturday said India has the potential to grow at 8-9 per cent, and only a higher growth rate can end poverty.
With India standing out at a time of a gloomy picture of the global economy, it's imperative to carry on structural reforms that have been put in place, he stressed. The focus will be on infrastructure, irrigation and farm productivity, he said, while speaking at The Economic Times Global Business Summit here.
Jaitley said India is one of the few economies that survived 2001, 2008 and 2015 global crises. "We probably have a potential to have a growth which is higher than what we have achieved. This 7-7.5 per cent is not our optimum range. The Indian normal is 8-9 per cent category. And it is only when if you grow at that pace, you can get rid of poverty," he said.
Stating that there is more than one factor supporting India, he said the country has a huge human resource, trained minds as well as a very large market. "We have potential for increasing manufacturing. We have innovative skills. Our labour cost is not rising as they are rising in China. We are not part of factor or transitions which are taking place in China," he said.
The finance minister said the economy the world over is doing badly because of the slump in oil and commodity prices. The slump "suits us because we are net buyers of these", he noted. "And therefore given these advantages, what is it that we have to do to put our house in order? I think the first important thing that we have to do is to carry on structural reforms."
He emphasised on keeping the focus on infrastructure sector, irrigation, improving agriculture productivity and manufacturing. "At the end of the day, what is it that you are asking for is to get that cutting edge that you must grow at 1-1.5 per cent faster than what you are doing today," he said. "I think with all these changes and hopefully in future rain Gods being kinder to us than in the last two years, it is not very difficult or impossible for India to achieve that. We all know that our potential is right there. Therefore, we have the potential."
On the retrospective tax controversy, Jaitley said taxes which are payable must be collected as the government needs legitimate revenues to run. "But their must not be unfair taxes. Wherever there is an unfair assessment, it brings you a bad name because we area rule of law society. Retrospective taxation brought us a bad name... It didn't bring any tax," he added.
Since coming to power, the NDA government decided not to use retro tax legislation to raise revenue. "We promised that no new notices will be sent," the finance minister said.
Courts settled a number of issues and the government decided not to appeal against the rulings that went against it. "The spiral effect of that is dozens of cases are now getting settled," he said.
"Today, 18-19 months after this government has taken over, there are about 2-3 of those issues left. Personally, I would like to see them sorted out as expeditiously as possible either through tribunal or judicial process," he made it clear.
Governments, Jaitley said, have no power to set aside an assessment order and it can only be set aside by judicial procedure.
"Therefore, there has to be a due process which has to be carried out and only when assessess are able to establish if there is an unfair order, we will accept that verdict," he said.
