BRICS Development Bank in the pipeline: Manmohan

Prime Minister Manmohan Singh has said that while India needs to incur significant public expenditures to raise the standards of living of a large population, a task that also needs to be grappled with continuously is maintaining a sustainable fiscal policy.

The statement assumes significance as the Central government reached 74.6 per cent of its target fiscal deficit for 2013-14 during the first five months (April-August) itself, according to the latest available official data. This has let the Ministry of Finance propose budget cuts for the UPA government’s flagship schemes such as the MGNREGA.

Dr. Singh was delivering the inaugural address at the 3rd BRICS International Competition Conference, 2013.

The Prime Minister said that BRICS countries — Brazil, Russia, India, China and South Africa —had created structures for cooperation, of which the two most significant agreements in the pipeline were those on setting up of a BRICS Development Bank and a Contingency Reserve Arrangement.

He stressed the need for greater economic and political coordination among BRICS countries for dealing with the common challenges emanating from global uncertainties. “Monitoring and managing speculative capital flows is a challenging task in times of global uncertainty,” he said.

Dr. Singh said that effective competition in markets needs to be enforced through public policy as anti-competitive behaviour hurts the poor the most. A competitive public procurement market can make bid rigging more difficult, he said.

“Developing infrastructure at a pace that supports the growth of industry and the increasing aspirations of the people is yet another challenge before us. Last, but by no means the least, there is the need for building credible institutions for sustained and equitable growth,” Dr. Singh said.

PTI adds:

Pitching for public sector enterprises being made more competitive, the Prime Minister said the state-run companies need to be given greater functional autonomy, be freed from bureaucratic control and not shielded from private sector competition.

“Going forward, our governments will have to increasingly adopt competition-neutral policies... Competitive neutrality requires that the government not use its legislative and fiscal powers to give undue advantage to its own businesses over the private sector,” Dr. Singh said.

Speaking at the BRICS International Competition Conference, Mr. Singh said “solution lies in giving public sector firms greater functional autonomy and freeing them from bureaucratic control and not in tolerating a slip in their competitiveness and then shielding them from competition.”

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