New Delhi: Asserting that its "extremely difficult to achieve double-digit growth in the current global environment, Finance Minister Arun Jaitley on Thursday said there is a scope for improvement from the current rate if reforms are carried on.
"I don't claim that it is possible in this global environment to come any where close to double-digit growth. It's extremely difficult, it's practically impossible to do that," he said at the India Today Conclave here.
Given various variables, the finance minister said, India can at least aim high and improve.
"For example, if you carry on some of the pending reforms and if you concentrate on some of these areas like manufacturing, investment in agriculture etc... If you can improve health of the banking system so as it supports growth, your private sector becomes more oriented to investment.
"If you are not able to go anywhere close to double-digit growth, the prospect of greater economic activity and improving upon your present rate is always there... The idea is to improve upon our growth rate even in the adverse global environment," he said.
Terming the current 7-7.5 percent growth "impressive" compared to the global growth, Jaitley said, "compared to our own inherent ability, one always feel that India can do much better."
If India has to increase growth by 2 percent from the present capacity, he said, a combination of several factors would be required including a supportive global environment and increasing share of manufacturing in economy.
"Domestically, the maximum potential to grow in terms of sector is agriculture... There is huge potential for growth... we can do much better in manufacturing if we develop an expertise for low-cost manufacturing considering the wage bill in China is going up and of course you need reform temperament in the country," he said.
The constituency that support reforms today is much larger today, he said, adding, it is much bigger than which one which obstructs reforms.
"Therefore, slowly we are moving in the right direction and if all the policy changes, taxation and otherwise do come about in India, you have better monsoon, step up investment in agriculture and private sector... And the supportive global environment, it is possible for India to get a significant amount of growth," he added.
Terming the emphasis of the Budget as "the correct one", the finance minister said "it is to fill in the pits where you can see them and one of the big stress (points) as far as the Indian economy is concerned is the agrarian India, and last two years of bad monsoon added to the problem".
The minister spoke of various measures announced in the Budget to help the middle class through a taxation policy, including a presumptive tax.
Jaitley drew a clear line on the ideological debate on economy, saying one needs to shift focus to rural areas because "that is where you need to invest".
He termed increasing competitive federalism between states as "a silver lining".
"I had used it more as a slogan a year and half ago, but today I can see it in action. There is a lot of reform activity going on in states. So, let me start by giving you an example of two states where reforms have conventionally never taken place -- West Bengal and Kerala," he said.
Despite the rural emphasis, Jaitley referred to major reforms announced in the Budget on February 29.
"I think one of the most important reforms which will come about, if we are able to push it this year, is freeing the state transport from the permit system and amending the Motor Vehicles Act. Today, state after state, you find an inadequate public transport service," he noted.
Jaitley also made it a point to highlight initiatives for the socially disadvantaged, the schedule caste, the schedule tribe and women.
On subsidies, he defended the government's policy as logical and rational. "It's directed only at vulnerable sections. People who don't deserve it are being weaned out by the process of identification of needs," he added. PTI