Theresa May breaks protocol to meet Arun Jaitley in UK

FM kicked off his just concluded 4-day visit to London with a lecture on 'transforming India' at LSE

British Prime Minister Theresa May broke protocol by dropping in on a meeting between Finance Minister Arun Jaitley and his counterpart Philip Hammond, the chancellor of the exchequer on Tuesday. She impressed upon the former the need to forge “closer relations” between India and Britain, “to look at different areas and a way forward” post-Brexit, a source disclosed.    

The finance minister kicked off his just concluded four-day visit to London with a lecture on “transforming India” at the London School of Economics (LSE). Here — it being a seat of learning, not a political platform — he was perhaps a little uncharitable in dismissing the 10-year period of Manmohan Singh government — which recorded the fastest gross domestic product growth in the history of independent India.   

In terms of reforms, he cited passage of the insolvency Bill as a major achievement and claimed a combination of demonetisation and the goods and services tax (GST) would be a catalyst for faster growth. He pegged 7-8 per cent annual magnification of the economy as “the new Indian normal”.

Jaitley listed to his audiences the various job creation schemes he had announced in his last two Budgets, while admitting “the banking sector is still stressed and the private sector investment is not picking up”.

Featuring in a public conversation under the auspices of Ficci and the UK India Business Council, Jaitley was relatively circumspect. When pressed on a roll-out date for GST, he replied “before September 15”. He also conceded: “It is quite likely that in the first few days there could be some teething problems, but in a great experiment of this kind that is always likely to be there.” 

The interviewer asked if there was any chance of GST not happening, Jaitley responded: “It looks unlikely because to undo a constitutional amendment is a very complicated exercise. It has never happened before.”  He also brushed aside the impact of hardening oil prices on the Indian economy.

The Financial Times wrote: “The GST plan is different from the demonetisation push in that it has been announced several years in advance, but the potential for disruption is nevertheless significant in a vast country riven by a patchwork of local levies and unofficial fees.” In a series of whirlwind inter-actions, Jaitley also met the British Foreign Secretary Boris Johnson and the Secretary of State for International Trade Liam Fox  not to mention head honchos at JPMorgan and the Confederation of British Industry. 

With Johnson, he flagged the matter of Vijay Mallya receiving sanctuary in the UK. “If you are a defaulter, you can come back to London and stay here,” he caustically commented at the LSE. An Indian official, though, sensed a “political will” on the part of Whitehall to effectively implement the extradition treaty between the two nations.