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– NEW YORK
Coinciding with the first anniversary of the BJP government in India, Finance Minister Arun Jaitley was in the city last week, touting the Modi Government’s achievements in one year. While lauding the economic reform agenda, he also admitted that some tough issues remain to be resolved before the economy can take off to a higher growth level.
Jaitley, addressing meetings of largely the investor and business community, said while statistics are impressive and the government has covered considerable ground since taking office, more remains to be done that will take two to three years.
Coinciding with the first anniversary of the BJP government in India, Finance Minister Arun Jaitley was in the city last week, touting the Modi Government’s achievements in one year. While lauding the economic reform agenda, he also admitted that some tough issues remain to be resolved before the economy can take off to a higher growth level.
Jaitley, addressing meetings of largely the investor and business community, said while statistics are impressive and the government has covered considerable ground since taking office, more remains to be done that will take two to three years.
The reason for this, he said, is that the aspirations of people are much higher today in India where neither the government, nor the people, or the industry are very excited about a 7 or 7.5 percent growth rate. “This is because everybody realizes, including me and the prime minister, that probably our potential is a little higher than that. So, having covered this distance, I think the next two or three years are going to be very critical because a series of reform steps which are in the pipeline have all to be implemented,” Jaitley said while addressing one of the four meetings in the city.
His four public engagements last week, included one at Columbia Club hosted by Columbia Business School, another at the Council on Foreign Relations and U.S. India Business Council, and an interaction in Waldorf Astoria Hotel hosted by the USIBC. Throughout, the finance minister sought to drive home one message: unlike the past, the economic agenda has taken center stage in India today, relegating politics somewhat to the backburner.
At the Columbia standing-room only meeting attended by more than 100 people, the minister said that the land acquisition bill facing some opposition in parliament, is needed for the betterment of the rural people, for their employment and to build better infrastructure similar to urban areas to spur development. “We definitely need to have a consensus on that despite some of the opposition in parliament,” he said.
Jaitley said the government’s progress in insurance and defense sectors in terms of foreign investments, or in some other sectors aims for equity participation. He admitted that retrospective tax issues, a concern of foreign investors, will be be resolved.
“I have no difficulty in saying that any decision which is retrospective, except in some very unusual circumstances, which creates fresh liabilities, is certainly not acceptable. And therefore, ever since the present government has been formed, we’ve lived up to our word that this government will not legislate anything that is retrospective,” the minister said.
Responding to questions about direct investment, and not institutional investment, he said while New Delhi had started in the defense sector with only 26 percent FDI, it has now reached 49 percent. But in some strategic sectors, decisions will be made on a case-by-case basis and FDI could be even higher than 49 percent but “That will take some time,” he told prospective investors.
The liberalization and reform, according to the minister could not have been possible some ten years ago. “But gradually, we have the movement in that direction,” indicating that more sectors might be opened for foreign investments, he said.
“We now have identified all the problem areas. And I think one by one as we go resolving most of them, hopefully we should reach what our destination targets are,” Jaitley said at the Columbia event.
Jaitley, who was in New York last week on a three-day visit, also rang the closing bell at the New York Stock. Exchange, a customary for visiting foreign leaders whose counties’ companies are registered with NYSE.
Outside the Columbia Club while getting into the car before leaving for Washington June 19th, he told reporters that global investors generally have confidence in India. “But their concern is stability in India, and we will provide that,” repeating what he had said at the NYSE.
Besides Washington, Jaitley is scheduled to visit San Francisco where he will have a roundtable meeting hosted by USIBC and the Confederation of Indian Industry.
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