Dismissing the perception of policy paralysis in UPA-2, Finance Minister Pranab Mukherjee on Sunday said that compulsions of coalition politics were forcing the government to evolve consensus on major issues and was confident that key reform legislations will be passed.
“There is no question of policy paralysis in New Delhi. I do not agree with them,” Mr. Mukherjee told PTI in an interview.
The Finance Minister was replying to apprehensions expressed by Corporate America over the perceived policy paralysis in the government and Chief Economic Advisor Kaushik Basu’s comments that there may not be any big ticket reforms till elections in 2014.
Rejecting criticism about lack of decisions, Mr. Mukherjee contended that the government has taken a number of policy decisions in recent months.
“We have a new manufacturing policy, very recently. It’s in operation. We have announced earlier that we will institute infrastructure debt fund. We have created infrastructure debt fund,” the minister, who is in Washington to attend the annual Spring meeting of the IMF and the World Bank, said.
“We announced that we shall make easy access to commercial borrowing. Series of measures for easy access to commercial borrowing have been done. I do not agree with their perception with the so called policy paralysis. There is no policy paralysis,” Mr. Mukherjee said.
On coalition politics, he said it has become a pattern now. “I am not quite sure whether by 2014 Indian electorate is going to give a decisive verdict. And when there are coalition politics we shall have to keep coalition partners with us. It is time-consuming but there is no other alternative.
“People will have to be on board and in order to have them on board we shall have to persuade them, we shall have to carry dialogue and discussions with them. This is the only way through which we build up consensus.”
On major reform legislations, Mr. Mukherjee said he was trying to get three legislations -- Pension Fund Regulatory Act, Insurance Act and Banking Amendment Act -- passed.
“Each has been recommended by the relevant Parliamentary Standing Committees and are under the considerations of the Parliament,” he said, asserting that reforms are an instrumentality.
The Finance Minister said the government has set its sight on achieving the goal of putting back the economy on higher growth path and controlling inflation.
“My first priority is to bring back the economy in higher growth path and to control inflation,” Mr. Mukherjee said, adding that even an inflation of six to seven per cent is too high for him.
“Of course inflation has increased that is seasonal. Third is to consolidate the fiscal situation. Fiscal deficit is high. So fiscal consolidation is to be achieved, inflation has to be moderated, high growth rate to be achieved. These are to be the priorities of the Finance Minister,” he said.
Time and again Mr. Mukherjee has been expressing his concern over the increasing inflation.
“On agricultural supply constraints, we have taken steps in budget we announced certain measures so that with higher production of those commodities which require, which are in short supply with the removal of that supply constraints it would be possible to reduce the inflationary pressure,” he said.
“From the demand side, three consecutive years, we enhanced the interest rate. So excess liquidity has been mopped up from the market, and these are the situation that always ought to be kept under watch.
“If we can achieve fiscal consolidation that will also have an impact on the inflation, inflation would be reduced,” Mr. Mukherjee said.
Keywords: Union Finance Minister Pranab Mukherjee, policy paralysis, IMF meet, Washington visit, Kaushik Basu comments, economic reforms, coalition politics, inflationary pressure, agricultural supply