New Delhi, June 1
Finance Minister Arun Jaitley today cautioned the country to prepare for “fiscal discipline” in order to restore the health of the economy and bring it back on the path of higher growth.

Aware of the immediate challenge he faces, the Finance Minister said the Narendra Modi government inherited an economy whose GDP figures grew by sub-5 per cent for two successive years, that had negative growth in mining and quarrying sectors, poor performance in manufacturing, a disturbed investment cycle and negative sentiment that affected trade, hotel and transportation sectors, which are going to witness slower growth than last year.

In his blog, “From Celebration to Challenges”, he noted that CSO estimates, released in May, show the inflation continuing to rise with April figure at 8.9 per cent. The slowdown in economic growth coupled with high inflationary pressure poses a challenge to the macro-economic environment. Tax collections are at 10.1 per cent of the GDP compared to the initial budget estimates of 10.9 per cent.

“India can ill-afford this trend. This has serious social consequences since slowdown comes with a decade of jobless growth. Reviving the growth momentum, containing inflation and altering the pattern of growth to gainful employment is today an overriding priority. There is a need to boost domestic low-cost manufacturing and hasten the pace of reforms. Price stability and growth are intertwined but may require a different strategy,” the Finance Minister said.