Govt to push ahead with long-pending reforms
The Hindu Business Line, May 28, 2009, page 1
Priority for lowering bank lending rates further.
Our Bureau, New Delhi
The Finance Minister, Mr Pranab Mukherjee, said on Wednesday that the next round of economic reforms will provide the next stimulus to economic growth. The stock markets seemed pleased by the announcement. The benchmark Sensex responded by ending the day with a gain of about 520 points.
In his first press conference after taking charge as the Union Finance Minister, Mr Mukherjee hinted that the Congress-led Government would now push long-pending reforms in the financial as well as real sectors of the economy.
Meeting with bankers
“Sustained stimulus to growth can be harnessed by the next round of economic reforms. We have a broad plan of action in mind. We need to seize the opportunity presented by the current circumstances for pushing long-pending reform measures in financial and real sectors..”, he said.
This was even as the Government was assessing the impact of three doses of economic stimulus announced in December 2008, January 2009 and in the interim Budget (February 2009).
The first step the Finance Minister proposes to take is to meet bankers and nudge them to further lower their lending rates, as signalled by the Reserve Bank of India through its monetary policy. “I want to get them (bankers) committed to a more benign plan of action,” he said.
He highlighted that industry and business have been hurt by the cost of finance and its availability. “While much has been done in the last eight months and international capital flows have resumed, the cost and the speed with which finance can be accessed remains a matter of concern”.
Mr Mukherjee said that he would try to complete the entire exercise of the passage of the Budget for 2009-10 by July 31. “For this, I need the cooperation of other political parties represented in the floor of both the Houses. As soon as the Parliament session starts, I will discuss with the leaders of political parties. If they agree to dispense with scrutiny by standing committees, then that would facilitate me to complete the exercise by July 31,” he said.
The Finance Minister also said that the Government proposes to bring into force the Prevention of Money Laundering Act Amendment passed by Parliament recently. This would make India’s anti-money laundering regime stronger, he noted.
Restoring growth
Mr Mukherjee said the Government was committed to restoring growth and employment. He noted that this would not have been possible without increased spending funded by incremental borrowing.
“This would need to be further continued in 2009-10. However, we are equally committed to the process of fiscal consolidation over a period of, say, two to three years,” he said.
He also maintained that the fiscal deficit projected for 2009-10 would not be breached. “I hope to stick to it (fiscal deficit of 5.5 per cent of GDP for 2009-10),” the Finance Minister said.
He expressed the hope that an early return to recent growth performance would help the country get back to its preferred path of fiscal prudence.
On infrastructure, Mr Mukherjee said the Government would have to focus on implementing and strengthening infrastructure investments.
“These concerns will be addressed with a view to impart further momentum for an early return to the high growth path of recent years. The pipeline of infrastructure projects will be re-appraised and made more robust. Where necessary, policy and procedures will be calibrated to give a boost to infrastructure spending,” he said.
The Hindu Business Line, May 28, 2009, page 1
Priority for lowering bank lending rates further.
Our Bureau, New Delhi
The Finance Minister, Mr Pranab Mukherjee, said on Wednesday that the next round of economic reforms will provide the next stimulus to economic growth. The stock markets seemed pleased by the announcement. The benchmark Sensex responded by ending the day with a gain of about 520 points.
In his first press conference after taking charge as the Union Finance Minister, Mr Mukherjee hinted that the Congress-led Government would now push long-pending reforms in the financial as well as real sectors of the economy.
Meeting with bankers
“Sustained stimulus to growth can be harnessed by the next round of economic reforms. We have a broad plan of action in mind. We need to seize the opportunity presented by the current circumstances for pushing long-pending reform measures in financial and real sectors..”, he said.
This was even as the Government was assessing the impact of three doses of economic stimulus announced in December 2008, January 2009 and in the interim Budget (February 2009).
The first step the Finance Minister proposes to take is to meet bankers and nudge them to further lower their lending rates, as signalled by the Reserve Bank of India through its monetary policy. “I want to get them (bankers) committed to a more benign plan of action,” he said.
He highlighted that industry and business have been hurt by the cost of finance and its availability. “While much has been done in the last eight months and international capital flows have resumed, the cost and the speed with which finance can be accessed remains a matter of concern”.
Mr Mukherjee said that he would try to complete the entire exercise of the passage of the Budget for 2009-10 by July 31. “For this, I need the cooperation of other political parties represented in the floor of both the Houses. As soon as the Parliament session starts, I will discuss with the leaders of political parties. If they agree to dispense with scrutiny by standing committees, then that would facilitate me to complete the exercise by July 31,” he said.
The Finance Minister also said that the Government proposes to bring into force the Prevention of Money Laundering Act Amendment passed by Parliament recently. This would make India’s anti-money laundering regime stronger, he noted.
Restoring growth
Mr Mukherjee said the Government was committed to restoring growth and employment. He noted that this would not have been possible without increased spending funded by incremental borrowing.
“This would need to be further continued in 2009-10. However, we are equally committed to the process of fiscal consolidation over a period of, say, two to three years,” he said.
He also maintained that the fiscal deficit projected for 2009-10 would not be breached. “I hope to stick to it (fiscal deficit of 5.5 per cent of GDP for 2009-10),” the Finance Minister said.
He expressed the hope that an early return to recent growth performance would help the country get back to its preferred path of fiscal prudence.
On infrastructure, Mr Mukherjee said the Government would have to focus on implementing and strengthening infrastructure investments.
“These concerns will be addressed with a view to impart further momentum for an early return to the high growth path of recent years. The pipeline of infrastructure projects will be re-appraised and made more robust. Where necessary, policy and procedures will be calibrated to give a boost to infrastructure spending,” he said.
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