India’s economy needs to reach an annual growth rate of 9 per cent to 10 per cent and then sustain that activity “many, many more years than 10 years” in order to improve infrastructure and bring down rampant poverty, Finance Minister Arun Jaitley said.
“We need resources and I can’t get resources until I grow by 9 to 10 per cent. And therefore I would like to see India grow by that rate for the next 10 years,” Mr. Jaitley said in response to a question following an impromptu speech at Columbia University’s School of International and Public Affairs.
Mr. Jaitley, in New York on a private trip just two days after presenting a Budget that focussed on boosting growth before taking on structural reforms, said he realizes that in order to achieve this goal, the $2 trillion South Asian economy needs to find investment from outside.
“I have no doubt about the fact that the investment available within the country is very modest. Even our banks’ ability to finance that is modest, and therefore we need it from wherever it is available,” he said.
The new Budget is the first full-year Budget since Prime Minister Narendra Modi’s landslide election victory last May. It promised higher investment in India’s decrepit roads and railways, while offering the carrot of tax cuts to global companies but the stick of tighter rules to get business tycoons to invest at home rather than stash wealth abroad.
India’s economy is forecast to accelerate to 8-8.5 per cent growth in the fiscal year starting in April, up from 7.4 per cent this year.
Mr. Jaitley used China as the example of what high growth rates can do over a decades-long period. He said that if the country could reach 8 per cent growth and then boost that to the 9-10 per cent range, “we will have substantially created a better infrastructure and brought down poverty rates at a faster pace.”