(Interviewer M.K.Venu)
Q. Mr.
Prime Minister, what are your first thoughts on the budget?
PM: Given
the challenges facing our economy, the Finance Minister has done a commendable
job. India needs to create jobs for our growing labour force to the extent of
about 10 million persons every year. To do that, we need to accelerate the
tempo of our growth. We need, as the 12th Five Year Plan has mentioned
eloquently, a growth rate of about 8 percent. This is a growth rate which is
consistent with our underlying potential. We have to get there. Although this
is a difficult journey - it cannot be accomplished in a single year - but the
Finance Minister, has taken important steps to reverse the pessimistic view
with regard to investment climate, with regard to the growth potential and
possibilities of our economy.
Q. What
reforms are you looking at in the six months ahead?
PM: Well.
The Finance Minister has laid out a roadmap. There is plenty of food for every
Ministry to chew upon. And each one of our Ministries has to ask itself this
question: If India needs an 8 percent growth rate, growth which is at the same
time inclusive and sustainable,what
is it that each Ministry should do ? The Finance Minister has, I think,
mentioned these challenges. It is up to the collective wisdom of my Council of
Ministers to convert these challenges into opportunities to accelerate the
tempo of growth, to make it more inclusive, to make it more sustainable.
Q. Will
your Government get adequate support in Parliament? There seems to be a
perceptible change in the attitude of the Opposition. But is the bureaucracy on
board? Are projects being cleared?
PM: There
have been problems with regard to clearances, with regard to environmental
clearances, with regard to forest clearances, land acquisition problems, many
of these areas are the responsibility of the state government. Whatever is
within the realm of possibilities of the central government’s action points, we
have committed ourselves that we will use the mechanism of the Cabinet
Committee on Investment to grapple with these tensions which exist in our
system, and to ensure that roadblocks, whether they are environmental clearance
roadblocks, or forest clearances, or other roadblocks, they are dealt with, so
that they can be cleared and removed.
Q. You
are confident that a positive climate is there for projects to be cleared?
PM: Well.
I think he is speaking on behalf of the Cabinet. And I am pretty certain that
the mood of the country is: this country must not lose any time. It must get
its act together to accelerate the tempo of economic growth, sustainable
growth, equitable growth, and I do believe that if the general mood of the
country is right, it will infect the bureaucracy, it will infect the
Opposition, and in this task, there are no winners or no losers. If India
succeeds in sticking to a growth path of 8 percent or more, I think the winners
will be the people of India; winners will be our young men and young women, who
desperately need new productive job opportunities.
Q. How
worried are you about structural deficiencies that have crept into the economy?
PM: There
are today, three types of barriers, which can affect the realization of the
growth potential. One is the fiscal deficit. The Finance Minister has charted a
path to bring the fiscal deficit under control, and if we succeed in that
quest, I think we would have created a better climate for investment; we would
have created a better climate also for more moderate levels of inflation than
we have had in the last two years.
The second
problem is that inflation has gone out of hand. Therefore, if the fiscal
deficit is brought under control, it will also enable us to moderate the pace
of inflation.
The third is, the
Current Account Deficit. We cannot reduce the current account deficit in one
go. As the Finance Minister mentioned, we have a Current Account Deficit of
about 75 billion dollars. In the short run, it has to be financed. In the
medium run, it must be reduced. We must reduce our dependence on imports of
oil, of coal, of gold, of petroleum products. This is a medium term objective,
and it can be achieved, partly by reducing unwanted imports, partly by boosting
the country’s export effort.
So a
multi-pronged strategy has to be in place to achieve credible answers to all
these three problems – tackling the fiscal deficit, tackling the inflation
problem, tackling the Current Account Deficit.
Q. What
is a safe Current Account Deficit for us?
PM: In
my view – 2.5 to 3 percent of GDP is a safe level of Current Account Deficit.
Q. What
do you see as the GDP growth in the coming fiscal?
PM: The
Finance Minister has mentioned, and yesterday’s Economic Survey also hints,
that it is realistic to assume a growth rate of about 6.2 to 6.7%, and that in
three years time, if we work hard, if the world economy also improves, we
should get back to the 8 percent growth path – in two to three years time.
***
SC/SH/SM
(Release ID :92777)
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