 "FM sees 10% economic growth target as the new normal")
He said in Washington on Wednesday the new normal for economic growth should be 9-10 per cent, and the country should aim for this.
"India's own normal, in terms of its growth rate, has to a target that is anything close to a double digit. India growing at five per cent, six per cent or even seven per cent is not an India that is going to face up this challenge (of a large young population)," Jaitley was quoted as saying by the Press Trust of India in his keynote address at a daylong conference, Deepening the US-India Commercial Partnership: The First Year of the Modi Government.
He said India has the potential to make 9-10 per cent its new normal in the years to come.
The minister made the remarks during his maiden public appearance hours after arriving in Washington to attend the annual spring meeting of the International Monetary Fund and the World Bank. The conference was organised by the Center for Strategic and International Studies, a Washington-based think tank.
Going up from 8.5 per cent to nine per cent and then to 10 per cent might not seem to be such a difficult task, given that the government had targeted the growth to increase by 1.1 percentage point from an expected 7.4 per cent for 2013-14. However, the International Monetary Fund (IMF) had projected India to clock 7.5 per cent growth in 2015-16 and 2016-17. It had forecast economic growth to be 7.8 per cent by 2020-21, nowhere near the double-digit growth.
To a query on the latest growth rate projection of 7.5 per cent by the IMF and the World Bank for the current financial year, Jaitley said the feeling in India was this "is not our" real potential.
Listing out the steps being taken by the Narendra Modi government - such as giving more financial powers to states, increased investment on infrastructure, emphasis on manufacturing - Jaitley said the road map laid out was to open the door for investment.
"By and large, it is a welcome move in India. There are very few sectors now, almost insignificant, that remain closed. Everything has been opened up," he said, citing insurance, defence, railways and real estate sectors in this regard.
Jaitley acknowledged that the land reforms Bill was a contentious issue in India today. "I have no hesitation in saying that the land law, if it remains in the present shape, is a big hurdle to employment creation. One of the areas where we are trying to ease the (land) acquisition process is creation of industrial corridor. This is capable of providing employment to a vast number of people in rural areas," he said.
Jaitley said the government was trying to "narrow down" the period in setting up new projects. "I have set up a new committee to look up into the whole mechanism of how the whole institution of prior permission can be replaced by a regulatory mechanism where it is far easier to start your business just complying with the guidelines that have been stated in that area," Jaitley said.
As these efforts would start yielding results in the next few years, the minister exuded confidence that India would enter a phase of double-digit growth.
When the net impact of all the latest reforms is realised, he said, it is capable of "taking us close to what we thought we can never reach and today there is a realisation that that is a realisable target."
Earlier, Arvind Panagariya, vice-chairman of the National Institution for Transforming India (NITI) Aayog, had said he expected the economy to grow 8-10 per cent annually through the next 15 years. "If the economy actually grows 8-10 per cent in rupee terms, in dollar terms, it will be 11-12 per cent. That kind of growth will turn India into an $8-trillion economy from the current $2 trillion," he had said.
If the old methodology of calculating gross domestic product (GDP) is taken into account, the economy has not witnessed double-digit growth, except in 1988-89, since Independence. However, it clocked nine per cent or more growth in 1975-76 and in the three consecutive years before the global financial crisis-hit 2008-09.