MUMBAI: Prime Minister Narendra Modi today said the nation’s macro fundamentals are strong and asserted that his government is firmly committed to the path of fiscal consolidation.
The USD 2.6-trillion domestic economy, which may see 7.4 per cent GDP growth this fiscal year, has emerged as a “bright spot” in the global economy driving growth, he said.
“Despite rising oil prices, inflation is within the mandated range. The government is firmly committed to the path of fiscal consolidation,” Modi said, addressing the third annual meeting of the multilateral lender Asian Infrastructure Investment Bank here at the iconic NCPA hall in south Mumbai.
The PM’s remarks came in the backdrop of retail inflation accelerating to 4.87 per cent in May, above the mandated 4 per cent for the seventh successive month.
Government debt as a percentage of GDP has been consistently declining, Modi said, adding the Indian economy has received a rating upgrade after a long time.
“India’s economic resurgence closely mirrors that of many other parts of Asia and has become the main growth engine of the world now,” he said.
“A ‘New India’ is rising. It is an India that stands on the pillars of economic opportunity for all, based on a knowledge economy, holistic development, is futuristic and resilient,” Modi said.
With a USD 2.6 trillion GDP, India is the seventh largest economy in the world and the third largest in terms of purchasing power parity, he said.
In the fourth quarter of 2017, GDP grew at 7.7 per cent and is projected to grow at 7.4 per cent this fiscal year, Modi said.
Allaying fears of any external threats to the economy at the macro level, Modi said “the over USD 400 billion forex reserves give the country enough cushion to withstand any external shocks.”
With macroeconomic and political stability and a supportive regulatory framework, India is one of the most investor-friendly economies in the world, he said.
“From the point of a foreign investor, India counts as an extremely low risk political economy. The government has taken a number of steps to boost investments. We’ve simplified rules and regulations for businesses and undertaken bold reforms,” Modi said.
FDI inflows have increased steadily, with over USD 222 billion being received in the last four years, he said.
Modi described the goods and services tax (GST) as one of the most significant systemic reforms, which has reduced tax cascading, increased transparency, and boosted logistics efficiency.
Under the renewable energy programme, the country has set a target to add 175 gw of renewable energy capacity by 2022, Modi said. Of this, solar energy capacity will amount to 100 gw, he added.
“We are well on course to exceed these targets,” Modi said.
On the agriculture sector which has been struggling for some time with lower prices and higher input cost, he said the country is promoting investments in warehouses and cold chains, food processing, crop insurance and allied activities.
“We are promoting micro-irrigation to ensure optimal use of water with increased productivity. I would like the AIIB to look into potential investment opportunities in this field and associate with us,” he said.
Announcing that the country will be hosting a global mobility conference this year, Modi said “we are working on e-mobility. The challenge before us is of technology, particularly with respect to storage.”
India is looking forward to continued engagement with its development partners including AIIB, Modi said, adding the country is the second largest shareholder of the Bank, with over 8 per cent stake and the largest beneficiary of its funds.
In a short period, AIIB has approved 25 projects in a dozen countries with a total financing of over USD 4 billion, Modi said. “This is a good beginning,” he added.
“With committed capital of USD 100 billion and a huge need for infrastructure in member-countries, I take this opportunity to call upon the AIIB to expand from financing USD 4 billion to USD 40 billion by 2020 and USD 100 billion by 2025,” he said. (AGENCIES)
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