Despite depreciation in the rupee and the high current account deficit (CAD) were transient factors that had indeed affected India, Union finance minister Arun Jaitley is confident that there are huge avenues of growth for India over the next 10-20 years, which is what investors are looking at. He asserted that the fiscal woes India were transient and the fundamentals of the economy would support strong growth.
Addressing the 16th Hindustan Times Leadership Summit, in New Delhi, he said that the achievement of a consistent growth rate of 7.5 % plus or minus in today’s global situation is the highest. For example, he said, the kind of investments taking place in rural India is adding more to the size of India’s middle class.
Jaitly promised more steps to stabilise the rupee and narrow the CAD, assuring businesses that the government would be agile in its response to global trends shaping the economy, which, he said was underpinned by solid fundamentals supporting annual growth of around 7.5% .He recalled that Indian economy has expanded at the fastest pace in nine quarters in the three months ended June, as strong domestic consumption and robust manufacturing growth overwhelmed any global trade-war worries.
Prices of crude oil — India’s biggest import — have risen more than 10% since August, a factor likely to drive headline inflation. “The way oil prices have been going up, there has been some adverse impact on the CAD. We are trying to take measures to narrow it down. Some more steps are likely,” Jaitley added..
Jaitley said that a growing middle class in India would help not just the country, but the global economy as well. Growing economic activity in the northeastern region as well as more women securing employment would also help in this growth of the middle class, he said.