PM promises to restore growth, investor confidence

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SME Times News Bureau | 06 Jul, 2012
While the world economy was facing challenging times, India's growth story was still intact, Prime Minister Manmohan Singh has said while promising action on several fronts to restore investor confidence, including clarity on tax matters.

In an exclusive e-mail interview to the Hindustan Times newspaper Friday, the prime minister also listed five areas as his priority in the short run to keep the India story going and said charges of policy paralysis in his government were a matter of perception.

According to him, his five priority areas were:

- Bringing complete clarity on tax matters to send a signal that India treats everyone fairly and reasonably

- Controlling fiscal deficit with measures on which consensus was being built (Read: cut in subsidies, and decontrol of transport fuel prices)

- Reviving mutual fund and insurance industries to open new savings options other than gold

- Clearing major proposals on foreign investment and make India a more business-friendly nation

- Giving major push to infrastructure development via the public-private partnership mode, including the Indian Railways.

According to the prime minister, while there was, indeed, a slowing down of capital flows from overseas, due to concerns over tax matters, the finance ministry was also issuing clarifications from time-to-time.

"This does not mean things have turned very bad. Coca-Cola has announced to invest $5 billion in India a few days ago. IKEA plans to invest $1 billion. The pessimism in the media and the markets is far more than reality," he said.

On the perception of policy paralysis, he evaded a direct reply and said there were problems that existed among political parties in the previous government run by the United Progressive Alliance (UPA), but that the focus remained inclusive growth.

"We are passing through a similarly challenging situation and I am confident we will roll out measures to restore economic growth once again," he said, adding he also did not believe that legislation was a bottleneck to economic growth.

"Barring an issue here and there, most economic steps that need to be taken do not need legislative action," he said.

"More important is that we political consensus in the government on some policies. These are genuine differences in opinion. So in a democracy, consensus building is the key to long-term economic success and we are steadily moving ahead in doing that."