'Fastest Reforms In 25 Years,' Says Arun Jaitley As Modi Government Turns 2

New Delhi: Finance Minister Arun Jaitley in an exclusive interview to NDTV talks about the structural changes and reforms brought in by the government to lift the economy. Mr Jaitley puts in perspective the challenges India faces internally with respect to the global economy, as the Modi government completes 2 years in power.

Here are the highlights of the interview:

On Economic growth under Modi government

• Well, I think a lot of structural changes and reforms have taken place. What we have noticed in the period from 2014 to 2016 is very significant.
• And the significance can be got from the fact that in 2014, we took over in a day, when India was off the global radar, investors were shunning us, the country was said to be indecisive, and the journey in the last 2 years has been from policy paralysis to the fastest growing economy in the world.
• The fact that a lot of structural reforms that are directional have taken place. Some parts of the global scenario have hurt us quite badly.
• The overall slowdown of the global economy, the shrinkage of exports, volatility, impact on markets, etc has hurt us.
• Global downturn, two years of bad monsoon are two big negatives.
• Increased public investment, FDI, reforms are positives.
• The bad loans situation will climax and then start declining

Major challenges for the government

• The world is in a serious economic situation. Economies across the world are between -2 and +2% growth, and therefore global trade has shrunk.
• That has an impact on exports, that impacts on domestic manufacture, global demand is down, that impacts on the domestic private sector.... So that's 1st negative.
• The 2nd negative is 2 continuous years of a bad monsoon.
• And the 3rd negative is the banking legacy that the UPA left behind in a seriously challenging situation, and private sector being stressed, and hence private sector sentiment lacking. These are the 3 main challenges and negatives before us.

On Goods and Services Tax Bill

• We must put it to vote and let the people decide if they want the GST bill or not.
• Everyone supports GST, only one party is not supporting it.
• GST will eventually come.

On Banks and loan defaults

• During the UPA, banks were lending. They must lend to support the people. But there must be some reckless lending in some sectors.
• The UPA went to sleep and did not rectify the sectors.
• The state discoms are distributing power in losses for the bank.
• Textile and Infrastructuresectors are being rectified so that the banks can take action on defaulters.
• As far as operational profits are concerned, the banks are making it.
• The RBI has brought the repo rate down by 150 points. The government and RBI are continuously in dialogue.
• We are not going to paralyse businesses. At the same time, the loan defaulters must pay.

On Raghuram Rajan's re-appointment as RBI chief

• Let's not go from a debate on issues to a debate on persons. RBI is an important institute and makes its judgements.
• Don't approve of attacks on RBI Governor.
• I read all comments but it is not necessary for me to give my opinion on all of them.

On performance of Rupee

• Under the current situation, the rupee has performed better.
• The dollar had hardened, and therefore every currency when compared to the dollar, was collapsing.
• Till August 2015 the Rupee stood its ground... but what the China shake up took place, the rupee came down when compared to the dollar, but when compared to every other currency in the world, the rupee fared better.

On tax structuring

• Understand how we structure tax. Today you pay tax thought your nose and it hurts you.
• Suppose you earn 100 times of what you earn from the stock market or thought a Mauritius route and don't pay taxes on it.
• Our mechanisms are build to safeguard from tax evasion.