Aim is to reclaim 8-9% growth trajectory; clarity will be given to FDI policy in pharma sector
Justifying the series of measures initiated recently, including the policy on foreign direct investment (FDI) in multi-brand retail, Prime Minister Manmohan Singh on Saturday outlined the government’s next set of economic reforms that will be ushered in to reclaim the annual growth trajectory of 8 to 9 per cent.
Addressing captains of industry at the 85th annual general meeting of the Federation of Indian Chambers of Commerce and Industry (FICCI) here, the Prime Minister made it known that his eyes were now set on reforms in GAAR (General Anti Avoidance Rules), the IT, Railways and pharma sectors, land acquisition, taxation, disinvestment and subsidies.
Dr. Singh made clear his intentions of completing the exercise on GAAR and taxation of the IT sector, bringing greater clarity in the FDI policy in the pharma sector, setting up the Rail Tariff Authority for rationally fixing passenger fares and freight charges, putting in place the Direct Tax Code (DTC) and the Goods and Services Tax (GST) Bills.
Clarity would be given to the FDI policy in the pharma sector, he said, holding out the assurance that the industry concerns had been addressed in the Land Acquisition Bill, which the Cabinet recently approved.
The government would be addressing issues of under-pricing of energy, particularly electricity, and petroleum products, but the poor and the vulnerable would be protected, Dr. Singh said.
While the disinvestment process would be speeded up to revive the equity markets, the government’s decision to set up the Cabinet Committee on Investment was expected to clear major projects in a time-bound manner.
Committing himself to root out pessimism, Dr. Singh promised to alter policy environment to not only accelerate economic growth but also ensure that the growth process was socially and regionally more inclusive.
Referring to the measures initiated recently, the Prime Minister maintained that these were taken at reviving investor sentiments, controlling the fiscal and current account deficits and improving infrastructure and savings rates commensurate with the requirement of an annual gross domestic product (GDP) growth of 8 to 9 per cent.
He said some of these decisions had been politically difficult. “The naysayers and the cynics have tried to halt us in our tracks. But we had the courage of our conviction and the interests of our people at heart.”
The Prime Minister explained the decisions on FDI in retail, civil aviation, power trading exchanges and broadcasting, which were also driven by considerations of slowing global trade and were based on what he termed sound economic logic.
He lashed out at those who opposed these moves. “I’m afraid those who oppose these moves are either ignorant of global realities or are constrained by outdated ideologies. For example, when I hear the debate on FDI in retail, what I hear are arguments against large-scale organised retail and not against FDI in retail.”
Not sparing industry either, Dr. Singh said the time was ripe to establish a new social compact between business, government and society and called upon it to own responsibility in supporting government action and providing employment for the under-privileged sections and physically challenged people and women.