“If we can handle our manufacturing sector, its ability to absorb a number of people coming from rural India and adding to India’s growth story is going to be much larger”. Observing that ease of doing business is work in progress, Jaitley said: “Today, there is no sector of economy which is saying I am being harassed”.

The fear is that if there is a hike in interest rates – for the first time since 2006 – there could be a flight of capital away from emerging market economies such as India towards the U.S. , since investments there would become more attractive. “But then, the entire regulatory and other systems have to prepare themselves much faster for this change”. “We have sought to restructure the model of governance which takes the burden of employment off a fragile agriculture sector”. Perhaps this assurance was needed on the eve of Prime Minister Narendra Modi’s visit to the USA at the end of this month as Mr Jaitley himself once justified retrospective taxes if the demand was genuine and said they would wait for the court verdict on the maintainability of such taxes.

Speaking about economic reforms, Jaitley said that while the goods and services tax regime was stuck because of political reasons, the government was taking other steps, like putting in place a new bankruptcy code, fast-track arbitration norms, and a revamped public procurement law.

The focus of the government, the Minister said, is also on the agriculture sector, which is largely rain-fed and provides livelihood to 55 per cent of the population. He also alluded to the World Bank Report and said tribal areas have jumped in the top six which highlights the scope of relaxing the norms for conducting business.

Sinha said the government plans to lift the cap on equity investments made by the main, $100 billion, state pension fund to 15 percent from 5 percent, in a bid to stabilise domestic equity markets by allowing greater investment by long-term funds. The percentage of subsidy as part of GDP has declined. “We are trying to resolve outstanding tax disputes”, he said.

The Finance Minister said that the present government was totally clear on the direction that economic governance of the country needs to take.

He said the last decade under Prime Minister Manmohan Singh was a “wasted decade” like that of 1970s and 1980s because decision-making “shifted out” of the PMO.