The Narendra Modi-led government is pushing ahead with its reform agenda to retain the country's position as the fastest growing large economy and help India mature into "a more developed economy", finance minister Arun Jaitley said on Wednesday.
"For India to realise its full potential for the next few decades, India certainly needs to pursue its programme for economic growth more vigorously and it's only then by maintaining higher level of growth that we can attract best response as far as poverty alleviation is concerned," he said delivering a lecture at Osaka University in Japan.
Jaitley was encouraged by India's 7.6 per cent GDP growth in the 2015-16 fiscal and a better-than-expected 7.9 per cent growth recorded in the fourth quarter of the fiscal, which he attributed the government's pro-growth policies, he said.
Jaitley said, "India will maintain this paramount position of fastest growing economy in the world. And if we did that we can present ourselves as a society which evolves from an emerging economy and moves towards a more developed economy."
"And we have a pipeline of reforms still left over the next few years to be implemented and notwithstanding global slowdown and two years of bad monsoon, we have reached a situation where we still have the highest growth rate in the world," he said.
While Jaitley wasn't sure if the world growth would be supportive, he said the monsoon rainfall in India this year promises to be better and that itself will push growth.
"Our reform process I am confident is going to continue. It had helped us in restoring the credibility of the economy and while restoring the credibility both domestic and international investors feel much more confident about investing in India. That has helped us," he said.
Jaitley is in the second-leg of his six-day visit to Japan, to woo investors and sovereign funds at a time when investors are "very seriously looking at India as a possible destination".
He said there was overall enthusiasm during his visit to investors as well as various pension and sovereign funds. "We offer them much better returns and hopefully a combination of these factors are increasing domestic demand," he said.
High growth and a movement towards a more developed economy will help India get rid of social inequalities that still exist, Jaitley added.
"And finally, we can prove to the world that democracy and the economic growth in a country which historically suffered poverty can co-exist. You can stabilise your democracy and you can economically grow...," he said.
To scale higher growth rates, the private sector, which has been "a little slow", needs to get into a greater momentum, he said.
The finance minister further said that if the world economy starts growing at 4-5 per cent then India can clock over 9 per cent growth.
"But today we have a situation where the world growth itself has been downgraded to 3.9 per cent and therefore in this midst of global slowdown where the environment is completely unsupportive, to maintain very high growth rates with an unsupportive global environment is difficult.
"It is difficult because the economies across the world start shrinking, trade starts shrinking. No economy can say I have remained immune from that. Japan and Europe have felt the impact of that," he said.
Jaitley said from 1991 to 2004, the reform process went on quite fast but it slowed down a little after that and has again picked up in the recent times.
"I can say with some comfort that India is now reaching a place where for the last two years it has become the fastest growing large economy in the world. Two years ago, we grew by 7.2 per cent, last year it was 7.6 per cent, and these figures are important," he said.
India, he said, has opened up its markets and stepped up public investment including in the infrastructure space and is concentrating a lot on boosting expenditure to improve the quality of rural life.
"We are trying to rationalise the tax structure gradually. We are trying (to make) immune the banking system as well as rationalise subsidies. We have made permission granting and exit from businesses much easier," he added.