Difficult steps needed to revive economy: PM

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SME Times News Bureau | 17 Dec, 2012
Prime Minister Manmohan Singh Saturday said the steps taken on the economic front were "only the beginning of a process to revive the economy" and were "politically difficult".

Speaking at the 85th Annual General Meeting of Federation of Indian Chambers of Commerce and Industry (FICCI), Manmohan Singh said the policy decisions would take the economy back to "its trend growth rate of eight to nine percent".

Making it clear that there would be no looking back, he said the government was "committed to doing everything that is possible to alter the policy environment, accelerate economic growth and make growth socially and regionally more inclusive".

"Even now, we are the second-fastest growing economy in the world," he said.

"Some of the decisions we have taken were politically difficult and 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," Manmohan Singh told the gathering.

The prime minister also took a dig at the opposition, ranging from the BJP to the Left parties.

"I'm afraid that those who oppose these moves are either ignorant of global realities or are constrained by outdated ideologies.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 foreign direct investment (FDI) in retail, what I hear are arguments against large-scale organised retail, and not against foreign direct investment in retail," he said.

"Our government has acted to reverse the cycle of negative expectations and stimulate investment," he said.

"We are bringing greater clarity the FDI policy in the pharma sector".

He said the rate at which poverty had declined in recent times was commendable.

"Despite the challenges we continue to face, we must recognise that poverty has declined at a pace never seen in the past 200 years," he said.

The nation can ill-afford disparities in basic facilities such as health, education, drinking water, electricity, and even banking, the prime minister said.

"Years of high growth enabled us to generate resources that have been deployed to improve the well-being of our people. More needs to be done," he said. "But we need to do more to eradicate poverty, ignorance and disease."

"It is in this context that we should see the major drive we have launched recently towards direct cash transfers. The drive is to transfer government benefits directly to the bank accounts of individual beneficiaries," he said.

"Our government has taken a series of measures aimed at reviving investor sentiment, controlling the fiscal deficit and improving infrastructure," he said, adding that there was need to step up investment and savings rates.

"Even as we make growth inclusive, we cannot lower our guard in pursuing policies that restore growth momentum to the economy," he said, adding that broadening social base of development improved well-being and widened the home market.

"Better rural infrastructure integrates rural economy far more effectively into the larger national economy. A healthy agricultural economy facilitates faster growth of industry. A more prosperous and better connected populace is a source of larger demand and markets for goods and services."

He also said the government would soon user in a more fair and transparent regime for land acquisition.