A News by PTI
Published by ptinews.com
New Delhi, Nov 30 (PTI) Finance Minister Arun Jaitley today said improved macroeconomic fundamentals have placed India on 7-8 per cent growth trajectory and the country needs big infrastructure investments over next two decades to evolve into a middle income economy and then into a developed one.
The funding requirement for infrastructure in the country is huge and there is a requirement of a whopping Rs 50 lakh crore investment in the sector over next five years, he said.
India has spent Rs 60 lakh crore in infrastructure during 2007-17.
Stating that India has been the fastest growing major economy in the last three years, Jaitley said, “We do hope that in the first instance we evolve into a middle income economy and subsequently we graduate into a developed economy.
“That’s the economic roadmap that we have for us. If we have to aspire to reach this, India will need to upgrade infrastructure over the next two decades. We need a lot of investment and we will need a lot of spending,” he said while delivering 5th Annual Defence Estates Day lecture here.
Observing that inadequate infrastructure is a major hindrance in the growth, he said, the government has been increasingly raising allocation for development of the sector.
In recent times, the government has increased infrastructure spending, Jaitley said, adding the Budget 2017 -18 made allocation of Rs 3.96 lakh crore for the sector.
Noting that the investment in infrastructure is essential to growth and it improves productive capacity of a nation, he said it leads to more jobs and more economic well being.
“India has standardised itself ordinarily for a growth rate between 7-8 per cent. If it slows down, it is more towards 7 and if it paces up it is more towards 8 per cent growth. It’s already close to USD 2.5 trillion economy in terms of GDP,” he said.
During the first quarter of the current fiscal, economy witnessed a growth rate of 5.7 per cent, the lowest in the three years.
Observing that the country has moved away from old era of double digit inflation, he said, “our statutorily fixed target is 4 per cent. We have been able to keep our current account deficit under control, and over the last few years India has had exemplary performance in terms of being able to bring down its fiscal deficit,” he said.
The net effect of all these is that India is getting closer to a situation where the country can spend what it earns, and borrows relatively less, he said.
“One of the great challenges which remained in India and that directly impinges on the creation of the world class infrastructure is that India was largely a tax non-compliant society,” he said.