In his blog on Monday, Jaitley said revitalizing the Indian economy is his most immediate challenge as the country’s Finance Minister.

“My immediate challenge of course is the state of economy which stares at all of us. We have inherited an economy whose GDP has grown by sub 5% for two years in a row,” Jaitley wrote in his blog on Facebook.

“Mining and quarrying sectors have gained a negative growth trend. The manufacturing sector has had an abysmal performance last year,” he added.

“The investment cycle has been disturbed. The negative sentiment has affected trade, hotels and transportation sectors which are posed for a slower growth compared to last year,” he further said.

Jaitley said India’s high inflation rate is also one of biggest challenges faced by him as the Finance Minister.

He added that the trend of economic slowdown together with towering inflationary pressure can have serious negative implications on the nation’s macroeconomic environment.

“As per the CSO estimates, released in May, the inflation continues to be rising with April figure at 8.9 percent,” Jaitley said.

“The slow-down in economic growth coupled with high inflationary pressure poses a challenge to the macroeconomic environment. Tax collections are at 10.1 percent of the GDP compared to the initial budget estimates of 10.9 percent,” he added.

Jaitley further said, “India can ill afford this trend. This has serious social consequences since slow down comes with a decade of jobless growth. Reviving the growth momentum, containing inflation and altering the pattern of growth to gainful employment is today an overriding priority.”

Stressing on the need to enhance domestic low-cost manufacturing and quickening the speed of reforms, Jaitley said one of the reasons behind people trusting Modi’s vision in the general elections is their disgruntlement with the UPA government on the economic front.

“There is a need to boost domestic low-cost manufacturing and hasten the pace of reforms. Price stability and growth are inter-twined but may require a different strategy,” Jaitley wrote.

“The victory of NDA and the significant electoral setback to the Congress was on account of the reflection of two different electoral attitudes. There was a high level of dissatisfaction with the previous government,” he said.

“There was hope in the BJP/NDA led by Shri Narendra Modi.  It is this hope which commands us to pull the country out of the present economic situation. This will involve fiscal rectitude as combination of monetary and fiscal policy,” he added.

Jaitley also stressed on the urgent need to save the nation from the claws of fiscal deficit and improving nation’s growth rates.

“Slower GDP growth will imply lower tax buoyancy and higher fiscal deficit. We must move towards an era of fiscal discipline where we can reduce the fiscal deficit, contain inflation and improve upon our growth rates,” Jaitley wrote.

“India must prepare itself for this. We must commit ourselves to this discipline so that in order to strengthen the Indian economy which can improve the quality of life of every Indian and pull out the deprived ones from the state of poverty. Short term disciplining till we reverse the present trend will give us long term benefits,” he added.

(JPN)

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