MUMBAI: 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.
However, Jaitley said it was incumbent on the government to ensure that India’s domestic parameters were strong.
“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.”