Domestic demand could inject fresh momentum to economy: President

Domestic demand could inject fresh momentum to economy: President
The Hindu Business Line, February 13, 2009, Page 5

Our Bureau

New Delhi, Feb. 12 The President, Ms Pratibha Patil, has said that the Indian economy would register a “relatively high growth” rate even in the prevailing adverse global economic environment. Bucking the global trend, Indian economy is set to grow 7.1 per cent this fiscal.

In her address to the joint session of both Houses of Parliament here today, Ms Patil said that the country’s fundamentals remained much better and that the domestic demand could inject fresh momentum to the economy. The calibrated and prudent economic reform pursued by the Government was helping the country to weather the extreme adversities of the global economic meltdown, she said.

The President highlighted that the Government had already taken a slew of measures to stimulate the economy at this juncture (global economic crisis). They include enhanced availability of liquidity and credit, reduction in taxes and duties and relaxation of Fiscal Responsibility and Budget Management (FRBM) constraints to help increase capital expenditure by the State Governments.

Ms Patil noted that all these measures would drive the demand for goods and services, reviving production activities in the manufacturing and services sectors. She underscored the need for rapid growth in industry and services to provide the avenues for employment required by Indian youth.

“India is a nation of young people. India’s demographic dividends can be realised only if the country invests in developing skills to make our youth employable,” she said.

On banks, the President said that they were “well capitalised” and face no threat unlike many banks in other parts of the world.

Rural infrastructure

As regards the gaps in rural infrastructure, Ms Patil said that these have been systematically addressed through Bharat Nirman.

“Bharat Nirman has served to integrate rural India more centrally into the growth process and unlock its potential”.

Under the rural roads programme, work on 25,000 villages had been completed to provide market connectivity to farmers. Over 50,000 villages have been provided electricity under the Rajiv Gandhi Gramin Vidyutikaran Yojana.

“Today, 98 per cent of our villages have telephone connectivity and mobile telephony is spreading fast in rural India”. In India, there is a phone connection for every three persons and the target is to provide 50 crore connections by 2010.

On central public sector enterprises (CPSEs), Ms Patil said that the Government had taken a number of steps for devolution of managerial and financial autonomy to these enterprises. As a result, the turnover and profits of the CPSEs had increased by about 45 per cent and 22 per cent respectively.

The President also said that the Government was committed to promote renewable energy technologies and increase its share in the energy mix. India has achieved grid-connected renewable power capacity of 13,740 MW and a capacity addition of 14,000 MW has been targeted for the 11th Plan.