“India About To Takeoff” As 2015-16 GDP Seen Between 8% to 8.5% – India’s 2015 Budget Recap

India’s Finance Minister Arun Jaitley

India is “about to takeoff” with economic growth seen around 8 to 8.5% in the fiscal year that is about to start in April, and as aiming for double-digit economic growth now seems feasible, according to India’s Finance Minister Arun Jaitley, Reuters reports.

Jaitley, presenting the Indian government’s full-year budget on Saturday in Parliament, announced a budget that aims for high growth while the pace of cutting the fiscal deficit slows as he seeks to boost infrastructure investment.

The Finance Minister said that gross domestic product (GDP) growth would accelerate to between 8 and 8.5 percent in the fiscal year that starts in April, versus a 7.4 percent growth rate — the fastest pace in the world — that is expected for the current year.

“India is about to take off,” Jaitley told lawmakers. “The world is predicting that this is India’s chance to fly.”

The Finance Minister delayed the deadline to cut the nation’s deficit to 3 percent of its GDP until to 2017-18 and said that in 2015-16 that the deficit would be 3.9 percent of its GDP, which is above the 3.6 percent target that was inherited from the previous government.

Reuters said that India, reaping the benefits of low global oil prices — India’s main import — was in a sweet spot with extra cash to upgrade roads and railways without busting its fiscal deficit and inflation targets.

As part of its budget, Jaitley announced an increase of 700 billion Indian rupees ($11.4 billion) in road and rail investments in the following year and that the government would launch five “ultra-mega” generation projects to end chronic power shortages, according to the report.

The Finance Minister also proposed that India introduce a scheme to monetize gold and introduce a sovereign gold bond.

India will also seek to boost the efficiency of its rural job creation scheme — which is India’s most expensive welfare program.

Here are some other notable items from India’s Finance Minister Jaitley on the 2015 budget, from various media reports:

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*Aiming to Implement Goods and Services Tax From April 2016

*Aiming to Keep Inflation Below 6%

*Aiming to Achieve Medium-Term Fiscal Deficit Aim One-Year Later Than previously Targeted

*Aim to Narrow Fiscal Deficit to 3.9% Next FY, 3.5% in FY2017

*Expect to Achieve 3% Fiscal Deficit in FY2018

*Committed to Rationalizing Subsidies

*Propose to Create Social Security System For Citizens

*Expand Insurance Cover Under Flagship Financial Inclusion Plan

*Plan to Set up IN200 Bln Fund For Developing Infrastructure

*Propose to Set Up Agency to Manage Public Debt

*Propose to Allow Foreign Investment in Alternative Investment Funds

*To Spend INR2.46 Tln on Defense

*To Spend 2.27 Trillion Rupees ($37 Billion) on Major Subsidies

*To Raise 410 Billion Rupees ($6.7 billion) Selling Stakes in State-Owned Companies

*To Inject 79.4 Billion Rupees ($1.29 Billion) of Capital Into State-Owned Lenders

*Propose to Reduce Corporate Tax to 25% From 30% Over Next 4 Years

*Propose New Law to Tackle “Black Money”

*Ease Tax Rules For Real Estate Investment Trusts

*Propose to Abolish Wealth Tax, But Would Impose Surcharge on Super Rich