Economy not as bad as it looks, says PM

Economy not as bad as it looks, says PM
The Financial Express, September 2, 2009, Page 10

fe Bureaus, New Delhi

Prime Minister Manmohan Singh on Tuesday said too much pessimism on economic growth is uncalled for the as global financial situation is returning to normal and the country could manage the drought very well.

“We are in a very strong position to manage the consequences of the drought. Our food stocks in particular are very high. The government is giving focused attention to all aspects of drought management, including both relief measures and efforts to protect the kharif crop as much as possible and to ensure a normal rabi season,” Singh said, while chairing the first meeting of the Planning Commission in the second term of the UPA.

Rains have been short of requirement this monsoon season. As on August 26, the overall rainfall was 24.6% lower than normal. But the country has buffer foodgrains of 50 million tonne, enough to meet the requirement of the public distribution system for 13 months.

Singh said, “We have to ensure that the momentum of planned development is maintained in the next two years and that our flagship programmes are fully funded”. The Planning Commission has projected a gap of Rs 1,60,000 crore to fund the government schemes in the remaining years of the 11th Five-year Plan (2007-08 to 2011-2012) in the absence of fiscal consolidation.

The global financial meltdown, which started last September, restricted the mobilisation of funds in developing economies and hit investments and growth. India’s economic growth dropped to 6.7% in 2008-09 from nearly 9% in the previous three years. The plan panel’s projection for economic expansion this year is still lower at 6.3%.

Seeking to calm down the nerves of economists, Singh said the global economic position that originally hit India’s economy is improving. “We have been through a difficult year because of the global economic downturn, which is now coming to an end with a slow return to normalcy in the months that lie ahead,” he noted.

Observing that there are some pending issues in the Integrated Energy Policy, the Prime Minister directed the Planning Commission to coordinate with the various ministries to address them. “There has been some progress in important areas, but the pending policy agenda is very large. Pursuit of these issues is the responsibility of different ministries. I direct the Planning Commission to pursue these issues.” As per the presentation given to Singh during the meeting, certain regulatory and policy changes are yet to be made by the ministries of petroleum, coal, power and new & renewable energy.

Singh said the government is working on streamlining of the Public Partnership Project (PPP) norms for higher private investments in health, education and urban development. “The progress (in implementation of PPP projects) has been less than what we would have wanted. We are taking steps to streamline the process so that PPP projects can move faster,” he added. Besides Planning Commission deputy chairman Montek Singh Ahluwalia, the meeting was attended by finance minister Pranab Mukherjee, home minister P Chidambaram and agriculture minister Sharad Pawar.