India’s finance minister optimistic 10.5pc economic growth target achievable

NEW DELHI: Finance Minister Nirmala Sitharaman expressed optimism, in interview published on Friday, that India could achieve its nominal economic growth target of 10.5% this fiscal year, and hinted that growth took priority over taxing diesel vehicles.

“I would like to believe that we will achieve the target,” Sitharaman told the Business Standard newspaper. India’s fiscal year begins on April 1. Nominal gross domestic product growth fell to a 10-quarter low of 8% in the June-quarter.

The minister also said stocking up of passenger vehicles by dealers to meet festival demand is an indicator for “activity and good buoyancy in the economy.” India’s festival season typically starts from late September.

She also said there was nothing holding back a majority stake sale of IDBI Bank but it was a matter of timing.

India is looking to offload its 30.48% stake in IDBI Bank, while state-run Life Insurance Corp (LIC) will sell a 30.24% shareholding. Presently, the Indian government and LIC collectively own about 95% in IDBI Bank.

Earlier this week, India’s road transport minister Nitin Gadakri he will propose an additional 10% tax on diesel vehicles, but then walked back on his comments, saying India is no such new tax.

When asked about 10% tax on diesel vehicles, Sitharaman responded: “I’m looking at an economy which has to grow.” In a separate interview, she said around 22 countries were negotiating and exploring bilateral trade with India in rupees.