World needs 'additional shoulders' to push eco growth: FM

"One of the great shoulders the world was relying on (was) China. The world now needs some other additional shoulders to give a push to the growth rates.

"It is a great opportunity and if we continue to move in the direction in which we are, I see over the next few years with a more friendly environment in the world as far as the economic scenario is concerned, probably our growth rates will move up, our ability to grow will move up and our ability to fight poverty at least will also improve," he said.

Jaitley delivered the keynote address at the inauguration of the Deepak and Neera Raj Centre on Indian Economic Policies at Columbia University's School of International and Public Affairs.

Noting that India grew by about 7.3 percent in 2014, Jaitley said that according to internal estimates, in 2015 "we could do a shade better than that."

He said that one of the main problems of credibility related to taxation issues. "As far as the taxation issues are concerned, a lot needed to be done at our end and therefore in terms of direct taxes, we'd lost credibility with the world," he said, adding that aggressive taxation did the country no good and does not bring taxes but it "brought us a bad name".

"For anyone in the government, it would be a very serious challenge where assessment orders have been passed, can only be set aside by a judicial process and not by an executive decision," he said, adding that to resolve each one of these issues has been one of his toughest challenges.

He, however, expressed satisfaction that one by one each of those issues related to direct taxes is now being put to rest.

Jaitley said the government is "keeping all options open" to resolve the taxation issues either by judicial or executive process.

"I think the fears of retroactive taxation... by and large have been put to rest," he said. Starting with the 2016-17 year, the corporate tax rate will be brought down to a 25 percent flat corporate tax.

He is also looking to put most of the exemptions, except those which encourage individual savings, to an end.

"Over the next four years this entire rate would come down to 25 percent. And I will be removing each one of those exemptions one by one. I am shortly going to notify all the exemptions which are going to be rationalised this very year itself," he said.

Pointing out the macroeconomic fundamentals, he said that inflation is broadly under control and the Central Bank has slowly but steadily in the last 16 months brought down the repo rate by almost 125 basis points while keeping inflation broadly under control.

Fiscal deficit is also under control and the country is on track to achieve its fiscal deficit target, he said.

"Having achieved these fundamentals and correct fiscal prudence, we are targeting to reach a three percent fiscal deficit figure over the next 2-2.5 years and we are well on track to achieve that," he said.

When asked about the Trans-Pacific deal reached between the US and 11 other partner countries and how India plans to counter such deals, Jaitley India would have to strengthen its own economy and it is in negotiations with various trade arrangements in various parts of the world.

"We obviously realise we cannot have an isolationist existence," he said. He pointed out that there was a time when India had an "agitational approach" to a lot of such international arrangements.

"We would go and attempt how do we block the whole arrangement but today there is a realisation that India is far past that stage and we have to be a central player in a large number of these actions," he said.