Union Finance Minister Arun Jaitley today said that the series of reforms initiated by the Narendra Modi government like demonetisation and the Goods and Services Tax have put the Indian economy on a ‘far more stronger track’.
"These are institutional reforms. These are structural changes. And these structural changes, I think have put the Indian economy on a far more sound track so that we can look forward for a much cleaner much bigger India economy in the days and years to come," Jaitley said, addressing the students of the Columbia University in New York.
Jaitley, who is on a week-long visit to the US to attend the annual meetings of the International Monetary Fund and World Bank, said, "Consistent steps have been taken to formalise and expand the more formal economy as far as India is concern. And wanting to formalise that economy, one after the other steps are taken against shadow economy."
He said that some of these steps like the demonetisation, the GST – which could lead to de-stocking of existing stocks – can have a transient impact on manufacturing for a quarter or so. But in the long run, these are institutional reforms and structural changes.
Referring to the series of economic reforms that India has undertaken since 1991, Jaitley said the Indian model now seems to be emerging.
"Even as the Indian economic reforms started a few decades late, the direction that India followed is probably the direction that helped the country considerably. And therefore, any form of debate, discussion or suggestions to go back to more regulation, to go back to stricter controls, not to integrate itself, I think, we are in the process of dispelling any notion of that kind," he said.
Jaitley said there is a consensus on reforms in India. He said the government convinced people that domestic investment is grossly inadequate.
"What you require is an additionality of evidence. And therefore, you have to create an environment in India where people find India a friendly place to invest in," he said as he described the key hurdles in the process.
"Our doors were too narrow. Our limits did not allow them. The second hurdle was even when we allowed them, between the decision to start businesses in India and the eventual commencement of business. You could spend years and years before you got to your permissions, he said.
"India has opened up in sectors where there was a scope for opening up. And not in a single case the government faced a protest," he said.