India can replace China as global economic force: Jaitley

Finance Minister Arun Jaitley today again made the claim  that India, with a potential 8-9 per cent growth rate, can replace China as the driver of the world economy.

The country has already laid down a "red carpet" for businesses, which want to invest here, he told the BBC in New Delhi, adding that he was committed to push ahead with the government's reforms agenda.

"The world needs other engines to carry the growth process. And in a slowdown environment in the world, an economy which can grow at 8-9 per cent, like India, certainly has viable shoulders to provide the support to the global economy," he said.

In contrast, Reserve Bank of India governor Raghuram Rajan had said just a day earlier that it will be "a long time" before India can replace China as a growth engine for the global economy, even if it grows at a faster rate.

"My message to the people wanting to do businesses in India is that there is a red carpet laid down for you. India needs investments, India invites investments and we are going to be one of the most investor-friendly destination," he said, adding that the present government will never resort to retrospective taxation.

The Indian economy grew by 7.3 per cent in 2014-15 and is estimated to grow by 8-8.5 per cent in the current fiscal.

"In an environment where there is a relative global slowdown, India seems to be doing reasonably well. We finished last year with 7.3 per cent growth rate, will probably finish this year with a slightly better growth rate than that and next year hopefully will be a little better," Jaitley said.

According to the International Monetary Fund (IMF), India will overtake China as the fastest growing emerging economy in 2015-16 by clocking a growth rate of 7.5 per cent.

On the other hand, China will witness a deceleration with growth rate sliding from 7.4 per cent in 2014 to 6.8 per cent in 2015 and 6.3 per cent a year after.

''People wanting to do businesses in India is that there is a red carpet laid down for you. India needs and invites investments and it is going to be one of the most investor friendly destination.''

Jaitley said, "I see this as a great opportunity. The Chinese normal has now changed. It is no longer the 9 per cent, 10 per cent, 11 per cent growth rate".

An unexpected devaluation of the Chinese yuan triggered a sell-off in their stock markets, which had a ripple effect in markets the world over.

The Indian equity market too fell the most in its history on Monday, but has since recovered. The rupee too was hit badly by the global developments.

This an opportunity and challenge for Indian politics, Jaitley said, adding, "If we can continue to reform at a faster pace and really attract global investment, then our ability to provide that shoulder which the world economy needs will be much greater."