Expresses concern at high fiscal deficit
Prime Minister Manmohan on Thursday that the downturn in the global economy had resulted in a fall in growth and exports and an expansion of the fiscal deficit.
“Of particular concern is the fiscal deficit, which is too high and acts as a deterrent to domestic and foreign investment,” he said, addressing the Union Council of Ministers at a special meeting here.
The government’s focus, he stressed, would now be on developing the much- needed infrastructure. During the 12th Five Year Plan, the government set itself a target of close to one trillion dollars of investment in infrastructure. But to bring it off, he admitted, it would have to “overcome the constraints that currently deter or slow down this investment,” as “fuel supply arrangements, security and environmental clearances and financing difficulties” were all hampering development.
The growing gap between demand and supply of energy was “a major factor in widening the deficit on [the] current account of our balance of payments as well as the fiscal deficit,” he said. Therefore, it was imperative that “we come to a common understanding on these issues and work out mechanisms and remedial measures that will enable us to tackle these critical deficiencies on a priority basis.”
After Dr. Singh spoke, Finance Minister P. Chidambaram gave an overview of the economic situation, setting out what the government planned to do. Next, the new Minister for Parliamentary Affairs, Kamal Nath, stressed the need for all Ministers to be present and active in the two Houses during the coming session of Parliament — which is likely to very difficult — to take on the Opposition effectively.
Finally, Agriculture Minister Sharad Pawar of the Nationalist Congress Party spoke of the need for involving junior Ministers more closely in the work of the government, reiterating what the Prime Minister said earlier. Dr. Singh urged senior Ministers to “make full use of the capacities and capabilities of their Ministers of State by assigning them substantive tasks.”