Shun Negativism – PM Tells Industry Apr 03, 2013

Shun Negativism – PM Tells Industry    Apr 03, 2013

Major Economic Initiatives in the Pipeline

Prime Minister Dr Manmohan Singh exhorted the India Inc to be optimistic about the future growth prospects of the economy and assured the industry that the economy would get back to 8 percent growth trajectory in the near future.

While inaugurating the Annual General Meeting & National Conference 2013 of the Confederation of Indian Industry (CII) today, Dr Singh said that the pessimism in the business sentiments were unwarranted by the ground level realities. “I would urge Indian industry to have faith in our determination and avoid getting swamped by negativism. one of the advantages of being a democracy is that our shortcomings and deficiencies are always put before us. And there are indeed many deficiencies. Corruption is a problem. Bureaucratic inertia is a problem. Managing coalitions is not easy. But these problems have not arisen suddenly. They were all even earlier, when the economy was growing at 8 percent,” he added.

Taking a contrarian view on the growth prospects of the future, the Prime Minister said, “ I do not believe our future growth is 5 percent growth. We grew at an average of about 8 percent in the last ten years and we can get there again. But this calls for speedy and decisive government action.”  He also recapped his address at the CII AGM some seven years back (2007), wherein also he took a contrarian view on the state of the economy, when everything seemed to be going exceptionally well. That time, he cautioned the industry to be more calibrated and cautious in their responses to the prevailing upbeat mood of the economy.

Dr Singh observed that the prime mover of the Indian economy was the private sector, accounting for  75 percent of the investment. “Private sector needs an environment in which enterprises can flourish and create both jobs and growth” and added that,“ environment today is not what it should be and that is what the government should correct.” Conceding that part of the problem is due to global slowdown, the Prime Minister asserted that India’s growth figures are impressive than countries like Brazil, Russia, Japan and South Africa.

Prime Minister highlighted the steps taken by the government for restoration of macro-economic balance as a step towards higher growth.  Applying tight leash on fiscal deficit, rationalizing fuel subsidies, containing current account deficit, moderating inflation etc are some of the steps that are being contemplated by the Government.  “ We have financed a current account deficit of over $ 90 billion in 2012-13 without loss in reserves. We will take all steps to ensure that inflows remain strong for the next two years. I believe a well managed Indian economy seen to be back on a high growth path can attract continuing capital flows of this order,” he added.  

Laying emphasis on increasing the investment climate in the country, the Prime Minister said that the setting up the Cabinet Committee on Investment (CCI) would give the much needed fillip in channelizing investment in various sectors. He informed that in the petroleum sector, investments worth $20 billion for exploration and production activities in 40 oil blocks were held up for many years because of the security reasons, and that the CCI has recently given clearance for five blocks. “ We hope to resolve issues relating to another 31 blocks within the next two weeks,”   he added. He also informed that in the power sector, issues relating to the NTPC’s 2000 MW project in Jharkand’s North Karanpura  area have now been resolved, which was pending for the last 13 years. Steps being taken for speedy clearance of the projects from the environment angle, clearances for coal mining projects etc are some of the other steps being taken by the government. Laying emphasis on skill development, he wanted industry to work closely with the government. The government he said was reviewing the FDI policy comprehensively to see what more can be done. Concrete steps are being taken towards land acquisition and empowering the  small and medium enterprises.

Earlier in his welcome address, Mr Adi Godrej, President, CII has mooted the National Council of Economic Growth to spur all round growth. He also underscored the need for earliest implementation of Goods and services tax(TAX), Direct Tax Code, more clarity on environmental clearances etc. Mr S Gopalakrishnan, President Designate –CII stressed the need for  putting in place a knowledge driven economy, which gives importance to innovation, protection of intellectual property (IPR)etc.