M A I N   N E W S

Shed pessimism, PM tells India Inc
* Acknowledges problems in governance
* Outlines policy steps to revive growth 
Tribune News Service

New Delhi, April 3
Asking India Inc not to be “unduly pessimistic”, Prime Minister Manmohan Singh today said the current downturn was temporary. He outlined several policy steps to be taken in the coming weeks to revive economic growth.

Addressing the annual general meeting of the Confederation of Indian Industry (CII) after a seven-year gap, the PM said, “If the business mood was unduly optimistic in 2007, I think it is unduly pessimistic today. This needs correction. I would urge Indian industry to have faith in our determination and avoid getting swamped by negativism.”

He acknowledged several problems in governance that hampered growth. These included corruption, bureaucratic inertia and difficulty in managing coalitions. He, however, said these problems had not cropped up suddenly. These were there even earlier when the economy was growing at 8 per cent, he added.

Taking a contrarian view on future growth prospects, the PM said, “I do not believe our future is 5 per cent growth. We grew at an average of about 8 per cent in the last 10 years and we can get there again. But this calls for speedy and decisive government action,” he said.

He observed the prime mover of the Indian economy was the private sector, accounting for 75 per cent of the investment. “The private sector needs an environment in which enterprises can flourish and create both jobs and growth. The environment today is not what it should be and that is what the government should correct.”

The PM highlighted the steps taken by the government for the restoration of macro-economic balance as a step towards higher growth. Applying tight leash on fiscal deficit, rationalising fuel subsidies, containing current account deficit, moderating inflation are some of the steps that have been initiated by the government. Diesel prices are likely to keep going up as the PM indicated that these would gradually move towards market prices.

Laying emphasis on improving the investment climate in the country, he said the setting up the Cabinet Committee on Investment (CCI) would give the much needed fillip to channelising investment in various sectors.

He said investments worth $20 billion for exploration and production activities in 40 oil blocks remained held up for many years because of the security reasons. He said the CCI recently gave clearance for five blocks. “We hope to resolve issues relating to another 31 blocks in the next two weeks,” he added.

He said steps were being taken to ensure speedy clearance of projects from the environment angle, clearances for coal mining projects and ensuring fuel supply linkages for power projects. The government was reviewing the FDI policy comprehensively to see what more could be done. Concrete steps were being taken towards land acquisition and empowering the small and medium enterprises.

ManmohanSpeak

• If the business mood was unduly optimistic in 2007, I think it is unduly pessimistic now
• I urge Indian industry to have faith in our determination and avoid getting swamped by negativism
• I do not believe our future is 5% growth. We grew at an average of about 8% in the last 10 years and we can get there again
• The private sector needs an environment in which enterprises can flourish and create both jobs and growth
• The environment today is not what it should be and that is what the government should correct