Govt not infringing on RBI autonomy

Finance Minister Arun Jaitley is confident that if the current growth rate is maintained and if India’s global position is retained, the economy will be able to get out of the range of 7-8% growth.

Inaugurating the 91st Annual General Meeting of the Federation of Indian Chambers of Commerce and Industry (FICCI), Jaitley said in order to achieve this, however, it was important to identify several unreformed sectors.

The unreformed sectors are state road transportation, railways, dealing with urbanization, focusing on science & technology and research.

He also sought to dispel the impression that the government was in any way infringing on Reserve Bank of India’s autonomy.

Jaitley said that he could not see how an elected, sovereign government which flags off issues of credit and liquidity could be construed as infringing on the autonomy of the institution.

“Autonomy is not synonymous with isolationism” and therefore bringing issues of concern to the notice of the central bank should not be regarded as a hindrance to the autonomy of the RBI, said the Finance Minister.

He said that the next six months would see a rise in political rhetoric with voices which may not be the expression of the real intent.

The need of the hour, Jaitley said, was continuation of sound policies as against transient populism. The immediate target should be one that spells out the recipe for the next two decades; for an India where, further reforms would be the only constant for aspirational people whose attitude is for change and desire for a better quality of life.

He added that India had done extremely well in infrastructure areas such as aviation and ports and it must be ensured that these success stories were not converted into challenges for the economy.

Looking ahead, he said, India cannot afford to have fragile coalitions.

The need was to have policies that have clarity, directional stability and decisive leadership.

Market economy with social consciousness must be the way forward for ensuring equitable growth, he added.

FICCI President Rashesh Shah eadded: “Building a New India, the theme of FICCI’s AGM this year, is about change, the accompanying discomfort, the ensuing progress and most importantly, a shared belief in our bright future.”

“India of today is replete with opportunities in all directions. We are well and truly into our Golden Age of Compounding where our strong and consistent GDP growth rate will help drive us reach a GDP of US5 trillion by 2025 and US$40 trillion by 2040.

“We are on the course of becoming a true global economic superpower. However, supporting this compounding growth is the democratisation of credit.

“The world over, true economic growth is always preceded by credit access to masses. India is seeing this with the Jan Dhan Yojana laying the foundation,” he elaborated.

Shah said the government needs to repose its trust in the ability of the businesses and the markets in coming up with sustainable and viable solutions.

“With the government as an enabler and a catalyst for reforms, and responsible actions by the industry, we can be confident that we will be able to handle these challenges going forward. If we want to create history, we need to build chemistry between government and industry,” he said.

FICCI President-Elect Sandip Somany noted that: “Today, India’s growth performance and the medium to long term potential are well recognized. This is reflected in the way FDI flows have surged in the last four years; the way start-ups are growing in India; and the way technology has been harnessed to transform governance and set up new and higher standards of service delivery. Besides the economic sphere, we see a revolution taking place in the social sphere as well.”

“Going forward, improved governance, strong institutions and a robust social sector will be the key driving force in leading our economy to higher growth path with shared prosperity.

“The government has been working in this direction and FICCI will continue working with its members for aligning industry’s activities with the socio-economic development agenda,” he said. fiinews.com