Says appropriate action on withdrawing the fiscal stimulus would be taken next year.
After a bold tweaking of the Centre’s public sector divestment programme last week to suit the needs of the times, Prime Minister Manmohan Singh on Sunday unveiled the broad contours of decision-making on economic reforms while confirming that the fiscal stimulus measures would be phased out next year.
Inaugurating the 25th ‘India Economic Summit,’ organised here by the World Economic Forum (WEF) in association with apex chamber Confederation of Indian Industry, Dr. Singh said: “We are also better placed than any time in the recent past to push the reform process forward … We need to ensure that financial system can provide the finance needed for our development, and especially for infrastructure development. This opens up a broad agenda for reforms.”
In his address at the conference of global CEOs and captains of domestic industry, the Prime Minister sought to chalk out the road map of the country’s progress in various sectors of the economy, its resilience and what still needed to be done to ensure above seven per cent growth next fiscal and get back on track for nine per cent inclusive high growth trajectory. Given the domestic saving rate of 35 per cent of the GDP (gross domestic product), achieving nine per cent annual growth in the medium term was “eminently a feasible target,” he said.
“We are today a more open economy, open to both trade and investment and integrating successfully with the world at large. … Our strategy today is not just to deliver rapid growth, but to deliver rapid and inclusive growth [to] provide productive employment to our young population and raise living standards in rural areas … ,” he said.
Dr. Singh maintained that the government would make “gradual but steady” progress in financial sector reforms for developing long-term debt markets and deepening of corporate bond markets. And for this, it would “strive to build the political consensus” for passage of legislation required for reforms in the insurance and pension sub-sectors. “All these issues will be addressed through gradual but steady progress in financial sector reforms to make the sector more competitive while ensuring an efficient regulatory and oversight system,” he said.