Govt vows no letup on reforms after Delhi rout

New Delhi: The government will press ahead with reforms despite an election defeat in Delhi for Prime Minister Narendra Modi’s ruling party, Finance Minister Arun Jaitley said on Thursday.

Finance Minister Arun Jaitley
Finance Minister Arun Jaitley

Eight months after winning the strongest national mandate in three decades, Modi’s government is struggling to adopt an economic agenda to boost investment and jobs, because it lacks a majority in the upper house of parliament.

A crushing reversal for Modi’s Bharatiya Janata Party at the hands of an upstart anti corruption party in Delhi has damaged an aura of invincibility he had acquired through several prior state election wins.

“The fact that four elections have been won, and one has not, is absolutely no ground for believing that there will be any slowdown on the path that we have taken,” Jaitley told a news conference after talks with his US counterpart, Treasury Secretary Jack Lew.

The government is determined to pursue economic reforms, added Jaitley, who is due to present his annual budget to parliament on Feb. 28.

He gave an upbeat outlook, saying that India’s $2.1 trillion economy is now “poised to take off at a much faster pace”.

Jaitley spoke after India revised the way it calculates gross domestic product. The exercise has led to big upward revisions in the rate of economic growth while slightly reducing the estimated size of Asia’s No.3 economy.

New Delhi expects the economy to grow an annual 7.4 percent in the current fiscal year to the end of March, exceeding an earlier assessment of 5.5 percent by the Reserve Bank of India.

Jaitley’s 2015-16 budget is likely to be based on an assumption that the economy will grow at a rate of 8 percent or more, a government source has told Reuters.