Finance Minister Arun Jaitley has said the next 2-3 years will be “very critical” as the government plans to implement a series of reforms that will help India reach its “destination targets” of growth higher than the current 7-7.5 per cent rates.
“(In) India today neither the government, the people or the industry are very excited about a 7—7.5 per cent growth rate because everybody realises, including me and the Prime Minister that probably our potential is a little higher than that,” Jaitley said here yesterday.
During a discussion with president of investment firm Warburg Pincus and former US Treasury Secretary Timothy Geithner organised by the think tank Council on Foreign Relations, Jaitley said his government has covered a “lot of distance” in the one year that it has been in power.
“Having covered this distance, the next two-three years are going to be very critical because the series of reform steps, which are in the pipeline, are all to be implemented. We now have identified all the problem areas and one by one as we go resolving most of them, hopefully we should reach what our destination targets are,” he said.
Jaitley, who is on a 10-day trip to the US, said the macro-economic indicators and “bare statistics” look good but the aspirations are much higher. He said in the last few years, India’s credibility as an economy was being shaken.
“The last few years we lost the way once again. The reason why we lost way (is that) in terms of political administration and in terms of policy, we went wrong.
“In terms of political administration, within the government structure the prime ministers never had the last word, authorities were outside the government structure — the kind that could happen in a communist state.
“Devoid of that political authority, decision making came to a standstill. The Prime Minister did not have the last word and there were serious apprehensions that decisions were being taken or not taken for the wrong reasons,” he said.
He said that on the policy front, where the country went wrong was that the government started concentrating not on increasing productivity or generating wealth but on just distributing what the country already had.
“It did not work. We were falling off the global radar but in India there was a huge change that had taken place between the 1970s and this generation where people were getting restless and they knew this is not our potential,” he said.