Davos: Urging private sector to give up caution and make investments, Finance Minister Arun Jaitley has said it has become absolutely imperative to add to the credibility of the Indian economy, with the world looking up to the country as a bright spot amid global headwinds.
"The world regards India as a bright spot because we are the only one growing at 7 percent plus rate. The investors are investing in India and are looking positively at India.
"We must carry on structural reforms, add to the credibility of the Indian economy, concentrate on higher public expenditure and attract higher FDI (foreign direct investment)," Jaitley told PTI in an interview here.
The finance minister, who was here to participate in the World Economic Forum (WEF) Annual Meeting that ended last night, further said "the private sector must give up caution and invest".
According to him, there is further headroom available for India's GDP growth rate from the current 7-7.5 percent and would require some additional growth engines while the government's focus currently is on reviving private sector investments and attracting more foreign investments.
With headwinds from slowdown in the Chinese economy and problems in the US and Europe, Jaitley said the world is now getting ready to deal with a new kind of situation where the
problems are much different from those witnessed earlier.
"So far, the concern used to be high oil prices, today the concern is low oil prices," he said with regard to the global economy.
"My own impression is that the economy and the companies which are predominantly service sector-dependent, those segments are surviving. The companies and the economies which are dealing with energy, oil, metals and commodities are more adversely impacted.
"There is a mood of great concern," he noted.
Asked about the key takeaways from his own interactions with global leaders and from the panel discussions where he spoke, Jaitley said the unanimous view here was that India must respond appropriately and in a responsible manner to carry out reforms and grow further in the current economic scenario.
Stating that there was a mood of concern among the global leaders and other participants at WEF, Jaitley said India must carry on the structural reforms to once again defy the global slowdown.
"A lot of challenges have surfaced simultaneously. There is worry over China though Chinese themselves have said it is no longer possible for China to have a double-digit growth and
that they consider 7 percent growth as their new normal. But there is still a lot of global worry about China," he noted.
Further, the finance minister said the oil, metal and commodity producing nations are all facing serious challenges and there is a concern that the fourth quarter in the US may not be producing best results.
These issues have led to global uncertainty, resulting in readjustment of investments across several markets, he added.
According to Jaitley, money is being withdrawn from several markets and getting invested elsewhere. Investors are being cautious and averse to risk in an environment of uncertainty, he noted.
"So, stock markets across the world have been adversely impacted. They are globally integrated and the currencies in most parts of the world have also been adversely impacted. In fact, the impact on currency has been the least in case of India, nonetheless there is an impact," he said.