Union finance minister Arun Jaitley said on Sunday that his "overriding priority" is to revive the growth momentum, contain inflation and create gainful employment.
"My immediate challenge is the state of economy, which stares at all of us," Jaitley said in his Facebook post to sum up his first week in office. " We have inherited an economy whose GDP has grown by sub- five per cent for two years in a row. Mining and quarrying sectors have recorded a negative growth trend. The manufacturing sector has had an abysmal performance last year. The investment cycle has been disturbed." Jaitley pointed out that India can ill afford this trend as it has serious social consequences since the slowdown comes with a decade of jobless growth. He emphasised the need to boost domestic low- cost manufacturing and hasten the pace of reforms. Price stability and growth are intertwined but may require a different strategy, he added.
As per the Central Statistics Office estimates released in May, inflation continues to be rising with the April figure at 8.9 per cent. The slowdown in economic growth coupled with high inflationary pressure poses a challenge to the macro-economic environment, Jaitley observed.
The negative sentiment has affected trade, hotels and transportation sectors, which are posed for a slower growth compared to last year. Slower GDP growth will imply lower tax buoyancy and higher fiscal deficit. " We must move towards an era of fiscal discipline where we can reduce the fiscal deficit, contain inflation and improve upon our growth rates," Jaitley further added. Tax collections are at 10.1 per cent of the GDP compared to the initial Budget estimates of 10.9 per cent.
Indicating that some belt-tightening would be in store, Jaitley said, "Short-term disciplining till we reverse the present trend will give us long-term benefits. India must prepare itself for this. We must commit ourselves to this discipline in order to strengthen the Indian economy, which can improve the quality of life of every Indian and pull out the deprived ones from the state of poverty." Union finance minister Arun Jaitley.
Courtesy: Mail Today