India has appetite for growth despite global gloom: Jaitley
19 Apr 2016
India has an appetite for economic growth and is now more confident in dealing with other countries as well as engaging in multilateral trade arrangements as it has kept its growth momentum intact amid a "grim" global economic situation, says finance minister Arun Jaitley.
Speaking about India's future at the Asia Society in New York on Monday, Jaitley said, while India needs everything from more housing and factories to becoming more business-friendly, it's also committed to protecting the climate.
"We need more housing, we need more power...we need more roads, we need more factories," and our fuel requirements will increase. But Jaitley said beyond its own development, India is committed to bigger issues and is "completely committed to protecting the climate."
He said there's widespread support for reform in India. However, India's states will have to become more business friendly because investors won't go where doing business is difficult, "and the states themselves are realizing it."
The global economic situation, on the other hand. is "grim" and "worrisome" and this has prompted nations to put up "firewalls" around their own systems to save themselves from the slowdown and grow within the limitations, he said.
"If you were to ask me how's the global situation, I think it's grim and worrisome and what will be the state of play a year or two years from now, I don't think anybody has been able for sure to hazard even a significant guess," Jaitley said at when asked what his prognosis is for the global economy for the next couple of years.
He said the situation is so challenging that even a one-two per cent economic growth is considered "good growth under the circumstances".
"The global situation is challenging," he said, adding that global factors have impacted India also and "they are hurting us in terms of exports in particular."
China, he said, is "reasonably optimistic" because in the first quarter its economy had picked up 6.7 per cent.
China too has its own challenges "because a transformation is taking place in China with their emphasis toward domestic consumption and services in play," he added.
Jaitley said each of the regions in the world is trying to do its best within the limitations that exist.
"Low commodity prices have hurt some people and helped some people. Low oil prices have helped some people, it has hurt some people...Each one is trying to put firewalls around their own system so that within the limitations how best you can save yourself from the slowdown and grow within the limitations that the world has created for you," he said.
Jaitley, who had last week participated in the spring meeting of the World Bank and the International Monetary Fund in Washington, addressed analysts, economic experts and business executives at a session organised by CII and the Asia Society Policy Institute in the city on Monday.
He will also be meeting investors and top business executives and address a session at the United Nations during his stay in the city.
On protectionism, Jaitley said, "I can tell you that developing economies being protectionist is much less worrisome when the most developed countries you hear noises of protectionism."
"Trade is one area where every country watches its interests and that's a freedom we allow to each other," he said.
Asked about India's interest in joining trade pacts like the Trans-Pacific Partnership and the Asia-Pacific Economic Cooperation (APEC), Jaitley said every economy on the international forum will be "concerned" about its own interests but there has been a lot of change in attitude in India towards trade.
He said India has moved on from being uncertain about trade with other nations to a more confident economy on the world stage now.
"With a much larger economy, I think Indian confidence in terms of dealing with other countries in terms of trade has also significantly increased. The India of 2016 is going to be significantly different from the India of the early 1990s," he said.
Recalling the early years of the 1990s, Jaitley said there was a large body of opinion in India during that time including in the government "where we feared the unknown as to what would happen.
"We weren't strong enough to trade freely. Over the last two decades a lot of water has flown. We have become a large economy, we positively interact with bodies of other nations," he said.
