As massive commotion surrounds Asian equity markets, Indian finance minister Arun Jaitley said the country could easily outpace China to become a key driver of the global economy. In a recent interview, he said, “The world needs other engines to carry the growth process. And in a slowdown environment in the world, an economy which can grow at 8-9 per cent, like India, certainly has viable shoulders to provide the support to the global economy.”
“My message to the people wanting to do businesses in India is that there is a red carpet laid down for you. India needs investments, India invites investments and we are going to be one of the more investor-friendly destination,” he said, adding that the current government will never resort to retrospective taxation. “In an environment where there is a relative global slowdown, India seems to be doing reasonably well. We finished last year with 7.3 per cent growth rate, will probably finish this year with a slightly better growth rate than that and next year hopefully will be a little better,” Jaitley said.
Estimates released by the International Monetary Fund have stated India to overtake China as the fastest growing emerging economy in 2015-16, clocking a growth rate of 7.5 per cent. However, there will be a deceleration in China as the growth rate will slide from 7.4 per cent in 2014 to 6.8 per cent in 2015 and 6.3 per cent a year after. “I see this as a great opportunity. The Chinese normal has now changed. It is no longer the 9 per cent, 10 per cent, 11 per cent growth rate. If we can continue to reform at a faster pace and really attract global investment, then our ability to provide that shoulder which the world economy needs will be much greater,” Jaitley said.
Even then, the finance minister said that convincing the section of society which has still been left out off the benefits of the reforms will be a challenge. Asked about the recent crash in the stock markets following the devaluation of the Chinese yuan, Jaitley said: "When the Chinese economy slowed down a little, it didn't impact much. When the devaluation and the currency war started we did get somewhat adversely affected. When global markets fell, we also felt a huge impact in terms of currency and markets. But within a day we had recovered."
