Finance Minister Arun Jaitley believes India can hope to achieve 8% -10% growth through better economic management, rolling out of GST and stepping up investments in smart cities and rural infrastructure sector. Speaking at the NABARD National Symposium on Mitigating Agrarian Distress and Enhancing Farm Income, in Mumbai yesterday, Mr. Jaitley said even in challenging times, India is being looked upon as a bright spot. "When we compare ourselves on surface with various international parameters and how world economies are doing, we may have some opportunity to cheer.
Because even in challenging times, a 7.3% growth rate last year and 8% projection for the current year, give reasons for us to smile." Jaitley said. He added that the IMF has lowered the global growth rate to 3.2 – 3.3 % for the current year.
He further said “we have a lesson to learn from Greece, and the big message is countries must learn to spend within their means.” He asserted that India is well tracked on a road map, where our own fiscal deficit, current account deficit and level of inflation are under control.. “With revenue situation being more comfortable, and reform process gaining momentum India’s aspiration to cross 8% growth and aim at 8-10% growth is eminently achievable” he added.
According to him “the choice that we are making between higher growth or redistribution of resources is actually a false choice. We need higher growth on one hand and targeted schemes and policies are needed to ensure that the benefits of growth reach those who have been left out.”
Jaitley, however feels the agriculture sector presents its own set of challenges. He said, while a double digit growth in services sector, 7% growth in manufacturing is conceivable, we have been unable to ensure even a 4% growth consistently in the field of agriculture. With productivity levels reasonably low and 85% farmers being small and marginal, the agriculture sector is afflicted by higher input costs, low level of irrigation, high indebtedness , absence of an effective insurance mechanism and adverse impacts of climate change, he said. The Minister however, noted that despite these challenges, Indian farmers have been able to attain self sufficiency in foodgrains.
Jaitley said a large chunk of investment needs to be channelized into rural infrastructure development, with special emphasis on irrigation. “States like MP which have invested in irrigation have seen almost immediate results. It is this example we need to emulate” he added. The Finance Minister said that keeping this challenge in view the government has launched the ambitious Pradhan Mantri Krishi Sinchayee Yojana, entailing an investment of Rs 50,000 crores over a period of five years.
Earlier, H R Khan, Deputy Governor, Reserve Bank of India spoke about structural weaknesses in the agriculture sector and measures to deal with increasing farmer indebtedness. Dr. H K Bhanwala, CMD, NABARD spoke about role of micro-finance and contribution of increased institutional credit in mitigating agricultural distress.