Davos: With global headwinds hitting emerging markets as well, Indian Finance Minister Arun Jaitley on Wednesday said volatility has become a global norm, but India can certainly grow at 8-9 per cent in a friendlier global climate.
The view was echoed by business leaders from India and other countries here at the WEF Annual Meeting even as they felt that not "all perfect storms" in the world today would hit the Indian economy.
"Certainly, the world is facing a difficult and challenging situation. I don't think we are going into extreme conditions because there is predictability but volatility today is the norm and no country is immune to it," Jaitley said.
Admitting that exports have shrunk, currencies and stock markets are impacted, Jaitley said at a panel discussion here on the India growth story that the government is always trying to prepare itself to meet such challenges.
"The fact is we are (the) fastest growing economy, but we can do much better. Given a better climate and global situation, we can do much better. In a friendly global environment, we can do it (8-9 per cent).
"We had two bad monsoons while domestic and global issues impacted several sectors and that in turn has impacted banks. We are growing at 7-7.5 per cent. In a more favourable environment, getting an extra 1-1.5 per cent is not difficult," he said.
The finance minister said "oil prices have helped us replan the government expenditure.
One of the biggest reforms that have happened today is rationalisation of subsidies".
Speaking in the same session, noted economist Nouriel Roubini, widely known as Dr Doom because of his earlier predictions, said he does not see a global financial crisis like that of 2008 imminent, but there are risks on
several fronts and there are "many perfect storms".
"There are proxy wars in various parts of the world. Fall in oil prices should be a positive for the global economy, but the reality is it is leading to sharp negative reactions in various markets, including in India," he added.
He said falling commodity prices are a net positive for India, but low oil prices also present a risk to its growth.
On the positive side, overall the macro factors put India on a positive path, compared with its position a couple of years ago, and then there has been "good luck" in terms of falling commodity prices and "the government should push ahead with its reform initiatives in various areas". Apart from investments in human capital and steps to safeguard agriculture and irrigation from weather volatility, there are various areas where work should be done, he said.