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Jaitley pours cold water on simultaneous elections
City: 
Finance Minister says a normal monsoon and steady crude oil prices can push India’s growth to over 8 per cent in FY19

Finance Minister Arun Jaitley on Sunday chose to end speculation that the government could advance general elections, ordinarily due in May 2019, to later this year to coincide with the

Assembly elections in Madhya Pradesh, Rajasthan and Chhattisgarh.

A steady stream of comments this week from the President, Prime Minister and the Law Minister making the case for simultaneous elections had triggered speculation that they were setting the stage for advancing general elections. But in an interview to a news channel Jaitley said, “The government wants simultaneous elections, but it is not necessary that dates will be advanced for that.”

He also rejected the possibility that the Assembly elections in MP, Rajasthan and Chhattisgarh, due at the end of 2018, could instead be postponed and held along with the general elections. He said such a move would need changes to the Constitution. “Till the time Constitution is changed, and there is consensus on the issues, the Assembly and Lok Sabha elections will not overlap. And going by the reaction the issue evoked, it seems people (opposition) are not in favour of any such move,” he added.

Speculation has swirled in political circles that by clubbing the Assembly elections with the Lok Sabha elections, the BJP could counter any anti-incumbency to its state governments and emerge victorious riding the popularity of Prime Minister Narendra Modi, who continues to have high approval ratings in opinion polls. The National Democratic Alliance (NDA) government led by the BJP completes its full five-year term in May 2019. Modi repeated his call for simultaneous polls at the beginning of the current session of parliament, urging parties to rise above political lines to explore the idea.

Before him, President Ram Nath Kovind, in his address to the joint session of parliament at the beginning of the budget session, also stressed on the need to have simultaneous polls to the Lok Sabha and state Assemblies. Chief Election Commissioner OP Rawat has also been of the view that simultaneous Assembly and LS polls will require constitutional changes though the EC was logistically prepared to hold the two together.

The response thus far from the Congress has been tepid with  P. Chidambaram calling the idea “another jumla”. “In a parliamentary democracy, especially when we have 30 states, under the present Constitution you cannot have simultaneous election.”

 

In the interview that came days after the government’s last full budget, the finance minister also remarked that the Indian economy’s growth can canter into an 8 per cent-plus growth track if crude oil prices stay within manageable limits and the monsoon is normal.

“Some indicators, which are known as green shoots in the language of business, such as business confidence, PMI (purchase managers’ index), core (infrastructure) sector growth, are all good. We need to see what happens next. Monsoon is a factor for agricultural demand. I want oil prices to definitely not go higher than it already is.”

Asked if India’s real or inflation-adjusted GDP growth will exceed 8 per cent if oil prices remain the same and if monsoon turns out to be good in the coming summer season,  Jaitley said, “If such situations persist.” The Economic Survey 2017-18, tabled in Parliament last week, projected that India will grow at 7 to 7.5 per cent in 2018-19, with the economy poised to move into a faster lane, swiftly recovering from the disorderly effects of demonetisation and the rollout of goods and services tax (GST). It, however, cautioned about rising oil prices and identified agriculture as a focus area for reforms.

Jaitley said that India can achieve double digit growth rates under two conditions — if the revenue levels rise, pushing up spending capacity, and if there is a sustained global boom. “If economies are growing moderately across the world, then will be hard (to achieve double digit growth),” he said.

“I think, if we reach 8 per cent, it will be a good achievement, as no other country is able to even touch 7 per cent. If we cross 8 per cent, I will be very satisfied with myself,” the finance minister said. “The GDP growth rate should be analysed in the given global conditions.”

There are budding signs of recovery in the world economy, which is projected to grow 3.9 per cent in 2018. “A little aggression has come. If there is a 3.9 per cent growth in the world economy, then the emerging markets will grow faster. And among them, India will grow the fastest,” Jaitley said.

The finance minister also pointed out that India’s export sector has recovered smartly and is now growing at 14-15 per cent, signalling a revival in global demand.