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ET Awards 2015: We’re heading in the right direction, says Arun Jaitley

While aggressively pitching for economic reforms the finance minister emphasized that the fruits of growth have to reach the weaker sections of society.

ET Bureau|
Updated: Jan 12, 2016, 05.12 AM IST
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While aggressively pitching for economic reforms the finance minister emphasized that the fruits of growth have to reach the weaker sections of society.
While aggressively pitching for economic reforms the finance minister emphasized that the fruits of growth have to reach the weaker sections of society.
Thank you very much to The Economic Times for once again having invited me at the Economic Times Annual Awards, which are given to the achievers of the year.

I have always believed that as far as reforms are concerned, it is a race where there is no finishing line. I was told that I should speak on what really is the politics of reform in India. Politics is of vital importance because it effectively dictates the life of a country. Let us go back in terms of point to 1971, and by any stretch, in terms of politics it was a very popular phase, and if one is to rewrite the history of that period, probably one of the most disastrous as far as India is concerned. It is a phase where policy slowed us down, we adopted a direction in which growth itself was extremely difficult, and the thought process that emerged had a lasting effect... The same slogans cannot work in 2016 because India of 2016 is extremely difficult.

As we speak in 2016, it is a vital change that has taken place and one of the biggest advantages of 2016 is that a large majority of India has become aspirational and the constituency that supports reform is far bigger than the constituency that opposes it.

I think it is important that the direction of economic decision-making must be consistent, your pace may vary depending upon the circumstances.

Most states are keen to attract investments. Each state is competing for the same body of investors… Those who were opposed to all forms of investment are now being investor-friendly, or the ease of doing business has now become a part of their political idiom.

With regards to the year that was, I can tell you that it was a challenging year. It is a challenging year because you can see in front of you the external sector is not friendly…But, India is also learning the art of how to fight a crisis of this kind, knowing fully well that the external situation is not favourable to us.

So if we grow by something close to 7-7.5 per cent this year, how do we get that extra 1-1.5 per cent in order to get a cutting edge, and this will depend on several factors.

The first factor is not in my control — what the monsoons will be in the coming year. We have had two years of a less-than-normal monsoon, and in the last 100 years, there is not a single example of three bad monsoons, so hopefully, on the law of probability, I can hope that the Rain Gods are kinder to us next year, and that itself makes a difference.

The second factor, again not entirely in our control, is which way the global tailwinds will blow and which way the world is going to move. I think the world is not going to be extremely helpful in most areas... In such a situation, I think we do not have too many options, we have taken several decisions over the last 18-19 months, each one of them moving in one direction itself. I think the saving grace is that in terms of changing direction, India has not committed a mistake. Do we hasten that pace? The answer clearly is yes, and to hasten that pace, I think, as responsible Indians, it is almost everyone’s responsibility to make sure that the direction of the changes in reforms itself continues.

Obviously, taxation is extremely important, some other legislations are extremely important.

Unfortunately, the Upper House in India now seems to be the last bastion of the obstructionists, the states are no longer obstructionist. Public opinion, media opinion is no longer obstructionist... I have been repeatedly saying the composition of the Upper House changes every two years and, therefore, that itself sends a sense of optimism in that.

I think the other good news is there are not too many legislations to be passed, and once we are done with GST, once we are done with your bankruptcy legislations, etc., a lot of activity has to take place really through the budgetary proposals, it has to take place through various executive decisions.

And, therefore, the entire ecosystem in the country, a strong public opinion in support of that is something that favours us and it is this direction which will have to be maintained in the course of the next one year.

Politics, at the end of the day, is competitive, but it is also a responsibility of serving people and it is for everybody to realise that this emergence of India in a crisis situation probably can create a greater global impact than what we could create if all was going so well — that is a challenge and I do hope we have the strength and the ability to face the challenge.

(Edited excerpts from FM’s speech)

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