Saturday, 30 August 2014

Economy turning around, inflation moderating: Finance Minister Arun Jaitley on ... - Economic Times

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NEW DELHI: Finance minister Arun Jaitley said the GDP growth in the April-June quarter, the highest in nine quarters, indicates that the economy is turning around and the impact of initiatives by the new government will be reflected in coming months.

"In the first quarter [April-June], a 5.7% growth rate is encouraging. With the long-term impact of all the new initiatives setting in, I am sure the impact in the coming quarters will be much larger," he said. Finance minister noted that investor confidence is improving and inflation is moderating as a result of the recent government decisions to relax FDI norms and push manufacturing.


"The manufacturing curve has turned, the services sector is looking up and inflation has by and large moderated," he added.


Jaitley said the government would soon roll out a disinvestment plan, push Goods and Services Tax (GST) and try to get the insurance bill through in the ensuing winter session of parliament. "I do see a positive attitude among some of the principal opposition parties," he said on the Insurance Bill, which seeks to raise the foreign investment in insurance to 49%. "A significant amount of investment is just waiting in that sector to come in," he added.


On the GST regime, the finance minister said he is individually discussing with CMs and FMs of states who have raised some issues with regard to GST. "An early development of constitutional framework is top in the government's agenda," he added.


Referring to initiatives taken by the government in the infrastructure, manufacturing, SME and real estate sectors, he said, "I think the longterm impact of all these decisions would gradually be felt. And if you look at the impact today on investment mood, there is a sea change. The international investors are looking at us with great curiosity and I am sure we will see the impact of this." Jaitley said that central ministers enjoy large extent of decentralisation with accountability.


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