Challenges to Indian economy mainly external: Arun Jaitley
Mumbai, Aug 27 : Finance Minister Arun Jaitley on Monday said the challenges to Indian economy were mainly from external factors such as rising oil prices and the US-China trade war, but India's macroeconomic fundamentals were strong enough to overcome those challenges.
Predicting higher growth rate than the projected 7.5 per cent for this year, he expressed confidence that India would continue to grow at a "high trajectory growth rate" over the next several years and would overtake the United Kingdom next year to become the fifth largest economy in the world.
"Even this year, our growth rate is going to be somewhat higher than what conventionalists are projecting," he said while addressing the Annual General Meeting of Indian Banks' Association via teleconferencing.
Making his first public address after over a three-month gap due to his kidney transplant surgery, Jaitley said it seemed to be an optimistic picture that India was continuing its run as a fast growing economy in the world.
"Our macroeconomic fundamentals have been reasonably sound, and if at all any gets impacted, it's not going to be on account of any internal factors. The management of the economy has reasonably disciplined itself in decision-making as far as our internal factors are concerned," Jaitley said.
"Our challenges are mainly external -- the unpredictability and volatility of the oil prices, which is on account of either created shortages or some geopolitical issues. And I hope that these challenges will not go on indefinitely. They have to resolve themselves - that's how the world moves," he said.
"Coupled with this is the challenge of trade wars. Though we are not an active participant in this, but the impact and footprint of that can be seen in India, particularly when there is a tendency of some large economies to either devalue or undervalue their currency," the minister said.
However, Jaitley said it was incumbent on the government to ensure that India's domestic parameters were strong so that the economy had the resilience to face the challenge of those external factors.
"High growth rate, fiscal prudence, a lot of economic activity in the domestic market, and a series of reforms which have taken place over the last few years - they have certainly helped the economy"."
The minister, however, acknowledged the banking crisis as a key domestic challenge and said the government had learnt lessons from it and was now putting systems in place in order to strengthen the institution.
"One lesson that I have learnt is that when we desire to have a high growth rate, it must be accompanied by strong macroeconomic fundamentals. If we start sacrificing our macroeconomic fundamentals in order to temporarily push up the growth, then we are hurting ourselves elsewhere and that is bound to strike back the economy at some point of time," Jaitley said.
Referring to the indiscriminate lending during the previous UPA regime, he said this was exactly what happened around a decade ago."
"Indiscriminate lending to chase growth at the cost of macroeconomic fundamentals was a policy mistake... And the result of this has been that we ended up creating surplus capacities... We ended up funding projects which were unable to service the kind of debt that they had created -- and needless to say some had indulged in fraudulent practices," Jaitley said.
And once that error was committed, the next error was the evergreening of loans and eventually, the banks struggled to find methodologies to make recoveries, he said.
However, Jaitley seemed positive about the future of the Indian economy which has now become the sixth largest in the world overtaking France last month."
"Barring China which grows at 6.5 per cent, we are the only ones growing at 7.5 per cent plus. The other four in the top six are much bigger economies but growing at a relatively smaller rate. We may overtake one of them next year itself because the gap is very narrow. "
"And over the next few years we have to target those who are number four and three and overtake them. With kind of investments and economic activity taking place in India... I am reasonably optimistic that over the next several years we are going to continue to grow at a high trajectory growth rate," he said.
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Ruckus outside counting centre in Mamata's constituency, TMC claims entry of car with BJP flag
Kolkata (PTI): The counting centre at West Bengal Chief Minister Mamata Banerjee's Bhabanipur assembly constituency witnessed a ruckus a day ahead of the counting of votes, with TMC workers alleging two cars bearing the BJP's flag were allowed entry to the compound where EVMs are kept.
The incident comes close on the heels of a four-hour-long sit-in by Banerjee in front of the same counting centre at the Sakhawat Memorial Girls School on Thursday night, alleging unauthorised entry of persons into the strongroom.
With the polling now over, the wrangling for power in West Bengal has turned into a battle of nerves between the incumbent TMC and the BJP. Workers and leaders of both parties have been keeping a steely gaze on the security of strongrooms across the state where the electoral fate of the candidates is sealed.
Despite expressing her confidence in a "landslide victory", Banerjee has repeatedly aired her apprehensions of "counting malpractice and EVM tampering ahead of the day of results".
On Sunday morning, TMC workers camping 100 metres from the counting centre alleged that two cars with BJP flags entered the premises and went near the strongroom.
"The CAPF personnel at the spot are not allowing any vehicle or person to enter the premises of the counting centre without valid identity proof. Then how come this car, which we have not seen in the past few days, was allowed entry? Once we protested, the central forces asked us to move 100 metres away," a TMC activist said.
The TMC claimed that while the police personnel posted there promised the vehicle would be removed from the spot, it remained there for some time.
A senior Election Commission official said the car was passing by the Harish Mukherjee Road, and after checking by security forces and police, it was allowed to leave as nothing objectionable was found in it.
On Thursday night, two counting centres, including one at Sakhawat Memorial Girls School in the city, witnessed high drama after TMC leaders alleged a lack of transparency and possible malpractice at the strongrooms housing sealed EVMs of the assembly polls, which concluded on April 29.
TMC leaders and candidates, Sashi Panja and Kunal Ghosh, held a sit-in outside the Khudiram Anushilan Kendra counting centre on Thursday evening, alleging unauthorised activities inside the strongroom amid the absence of TMC agents
In Howrah, TMC protested renovation work by the public works department at a place adjacent to the strongroom, and the EC stopped the work temporarily.
On Saturday, the ruling party filed a complaint with the poll panel, alleging unauthorised sorting of postal ballot covers at the EVM strongroom in Khudiram Anushilan Kendra.
Similar scenes were witnessed on Saturday outside the strongrooms at Asansol College in Paschim Bardhaman and the Barasat Government College in North 24 Parganas districts, where TMC workers held protests, alleging that CCTV cameras were switched off for several minutes.
The EC turned down all allegations, saying the surveillance cameras were working in an uninterrupted manner.
BJP spokesperson Sajal Ghosh told reporters that the people of Bengal were finding it "hilarious" that the TMC, "which used to win elections through unfair means and strongarm tactics" were now coming up with all sorts of "frivolous charges".
"Are they scared of losing?" he posed.
