A “whole set of second generation reforms” will be unveiled in the next Union Budget, Finance Minister Arun Jaitely said on Sunday promising “a lot of exciting time ahead”.
The country needs “a larger opening out in more sectors,” it requires stability of policy and tax regime besides a “reasonable” cost of capital, he told PTI journalists at an interaction at the agency’s headquarters here.
Looking ahead, the Minister envisages the GDP growth to cross 6 percent in 2015-16 once the effect of all the steps proposed kicks in. From thereon, “we are going to take off,” he said.
Asked about the broad contours of the direction the Budget for 2015-16 will take, Jaitley said, “there is a whole set of second generation reforms.
“And there is a whole set of reforms which have arisen because some undoing is required. The coal ordinance is one undoing thing. Allocation of natural resources by non-discretion is undoing thing. A rational and reasonable tax regime is undoing thing. Some procedure changes in the land
(acquisition) law is an undoing.”
Enumerating the steps taken by the NDA government, he said that a series of measures taken in the last six months had “corrected the (depressing) sentiment”.
Answering a question about the state of the economy that he had inherited, Jaitley said the economy had “dipped quite low and there was a sense of disillusion” but in the past six months domestic as well as global investors were taking a huge interest although their faith in the Indian economy had been shaken badly.
“It will still take some time before results start surfacing. On the ground some green shoots are visible,” the Minister said.
“I think we have a lot of exciting time ahead of us and I do see investments coming into India. I do see domestic investors taking a lot of interest,” he emphasised.
However, he acknowledged that several more steps are required to create even more positive environment not only by the Central government but also by the state governments and several other institutions, which include the Opposition parties in Parliament.
Asked about the steps he intended to take, the Finance Minister replied: “You see you need a larger opening out which is what we are doing. There I think we are on track. One by one more sectors (will be opened up), there are avenues.
“You will require to give another comfort to investors. You have given them the comfort of stability of politics but (they require) stability of policy, stability of tax regime (and) correcting whatever major aberrations have taken place,” he said.
Jaitley said infusing liquidity into various sectors was necessary along with providing reasonable cost of capital.
“It is one thing saying we must concentrate on infrastructure. But for companies building highways… Power plants, who even if coal is made available to them, but access to capital (as well as) money locked up in disputes will have to be resolved,” he said.
Jaitley said if the government was not able to infuse that liquidity or unable to provide cheaper capital, then opening out alone would not help. “So, it is a chain of events which has to take place.”
He pitched for an interest rate cut by RBI at its next monetary policy review due next week.