Move to put economy on high growth path while adhering to fiscal consolidation
Finance Minister P. Chidambaram on Saturday sought to flag some of the immediate concerns that require focused attention and indicated more reform measures in the pipeline to put the economy on a high growth trajectory while adhering to the path of fiscal consolidation.
Unveiling further liberalisation in foreign institutional investor (FFI) norms aimed at bridging the current account deficit (CAD) in his address at the National Editors’ Conference here, Mr. Chidambaram asserted that the government “is steadily and surely” working on the next generation of reforms, having already travelled a considerable distance on the road to fiscal consolidation and reforms by way of liberalisation of foreign direct investment (FDI) limits in various sectors.
Among these, the recent economic reforms include liberalisation of FDI norms in multi-brand retail, civil aviation, partial deregulation of diesel prices and capping supplies of subsidised domestic LPG cylinders.
Mr. Chidambaram stressed that there was a need to create more high productivity jobs along with enhances skills of the labour force, as rapid economic growth, though one of the important objectives in an emerging economy like India, was not the only objective.
“Economic growth though important cannot be the only end. It is in fact a means to an end. It allows us to generate the resources to achieve more equitable development and the wider distribution of the opportunities that development offers so as to obtain higher standards of living for the masses. Equally important is the need for effective bridging of regional, social and economic disparities and empowerment of the poor and the marginalised, especially women, to make the entire development process more inclusive,” he said.
The Finance Minister pointed out that given the fact that “India is one of the youngest among the large countries of the world, human development assumes great economic significance for it as demographic dividend can be reached only if this young population is healthy, educated and skilled…India’s productivity and incomes are low, but this again can be a source of opportunity. By giving our people the right skills, tools and the right jobs, we can increase the value that they add for many years to come.”
On the Food Security Bill issue, Mr. Chidambaram expressed confidence that Parliament would soon clear it. “I am confident it [Food Security Bill] will be passed soon by Parliament, possibly in the Budget Session itself,” he said.
In response to a query regarding West Bengal Chief Minister Mamata Banerjee’s allegations regarding discrimination in allocation of funds to States, the Finance Minister said: “... No State is preferred, no State is discriminated against...charge of discrimination is wrong and I reject the charge,” he said. Noting that he never favoured the idea of special package for States, he said the new Finance Commission has been asked to look into the problems of debt-stressed States and advise government on how to deal with them.
Referring to global economic environment, Mr, Chidambaram said the euro zone crisis had impacted investment around the world and “India is no exception…The risk to global stability is the euro zone crisis. There is no definitive solution still in sight.”