New Delhi, (IANS) Prime Minister Manmohan Singh Wednesday said his government would act decisively to boost India’s economic growth and roll out more reforms such as liberalising the foreign direct investment (FDI) regime in the coming months.
“We are reviewing the FDI policy comprehensively to see what more can be done in the coming months,” the prime minister said, addressing industry captains at the CII National Conference and Annual General Meeting in the capital.
He assured them faster regulatory clearances and resolution of inter-ministerial differences to revive the investment climate domestically. Efforts were also on to resolve fuel supply issues faced by the power sector in a time-bound manner, he said and hoped to see results in the next three weeks.
Asking the industry “not to be swamped by negativism and have faith in the government’s effort”, he said the economic slowdown was temporary and the country could clock eight percent growth.
“I do not believe our future is 5 percent growth. We grew at an average of about 8 percent in the last ten years and we can get there again,” he asserted.
The prime minister said corruption and inertia in bureaucracy were problems; managing a coalition was not easy but these were not issues that have risen suddenly and were there even when India was growing at eight percent.
Saying India is a private sector-led economy, the prime minister urged India Inc to play a constructive role in reviving growth.
“Government is not the prime mover of growth. In a private sector-led economy – and I repeat, we are a private sector-led economy with 75 percent of investment being in the private sector which includes farmers, small businesses and the corporate sector – the driver of growth is indeed private investment.
“But the private sector needs an environment in which enterprise can flourish and create both jobs and stimulate growth. It needs an environment, which will ensure that this growth is inclusive. The environment today is not what it should be, and that is what the Government must correct,” he said.
The prime minister said the Land Acquisition and Rehabilitation and Resettlement Bill had been cleared by the Cabinet and it “will soon go to Parliament”.
The bill seeks to address problems the industry faces with regards to acquisition of land for setting up green-field projects.
On the Financial Sector Legislative Reforms Committee (FSLRC) recommendations, he said they were being “carefully considered” by the government.
Headed by Justice (retd) B.N. Srikrishna, the FSLRC, among other things, has recommended setting up of a unified financial agency as an arching regulator after amalgamation of SEBI, IRDA, PFRDA and FMC.
Commerce and Industry Minister Anand Sharma later said further liberalization of foreign investment norms could include raising FDI cap in sectors like defence, banking and insurance in a “calibrated and incremental” manner.
The prime minister said the first step in dealing with the domestic problems was to restore macro-economic balance by reducing the fiscal and current account deficits which, he said, was essential for investment and capital flows.
“Over the past several years, our fiscal deficit expanded to a level which is simply unacceptable. This is partly because of a conscious policy of fiscal stimulation which was followed by many countries. Most countries that followed this policy are now reversing the process. We must do so also.
“That is precisely what the finance minister has tried to do. He has targeted a reduction in the fiscal deficit of about half a percent of GDP in 2013-14 and announced continuing reductions of that order each year, up to 2016-17. We are determined to do everything possible to achieve this target.”