Next 2-3 years 'very critical' for economic reforms: Jaitley

He said that the govt plans to implement a series of reforms that will help India reach its "destination targets" of growth higher than the current 7-7.5% rates

Finance Minister Arun Jaitley  said  the next two to three years will be “very critical” as the government plans to implement a series of reforms that will help India reach its “destination targets” of growth higher than the current seven to 7.5 per cent.

“In India today neither the government, the people or the industry are very excited about a seven to 7.5 per cent growth rate because everybody realises, including me and the prime minister, that probably, our potential is a little higher than that,” Jaitley said.

During a discussion with president of investment firm Warburg Pincus and former US Treasury Secretary Timothy Geithner organised by the Council on Foreign Relations, Jaitley said  his government has covered a “lot of distance” in one year.

“... the next two-three years are going to be very critical because the series of reform steps, which are in the pipeline, are to be implemented. We now have identified all the problem areas and ... will resolve most of them.”

Allying concerns of American business community and investors, he said that any decision which is retrospective and creates fresh liabilities is not acceptable.

“I have no difficulty in saying that any decision which is retrospective, except in some very unusual circumstances, which creates fresh liabilities is certainly not acceptable,” he told a New York audience.

Jaitley, who is on a 10-day trip to the US, said in the last few years, India’s credibility as an economy was being shaken.

“The last few years we lost the way once again. The reason why we lost way (is that) in terms of political administration and in terms of policy, we went wrong. In terms of political administration, within the government structure the prime ministers never had the last word, authorities were outside the government structure — the kind that could happen in a communist state. Devoid of that political authority, decision making came to a standstill. The prime minister did not have the last word and there were serious apprehensions that decisions were being taken or not taken for the wrong reasons,” he said.

He said that on the policy front, where the country went wrong was that the government started concentrating not on increasing productivity or generating wealth but on just distributing what the country already had.

"It did not work. We were falling off the global radar but in India there was a huge change that had taken place between the 1970s and this generation where people were getting restless and they knew this is not our potential," he said.