SME Times News Bureau | 27 May, 2015
Economic
growth did not pick up as much as people expected as a result of
government action, the government's Chief Economic Adviser Arvind
Subramanian said on Tuesday.
Reeling out facts
and figures on the performance of the NDA government during its first
year, Subramanian told reporters in New Delhi that people were judging the
rulers by outcome and not effort.
"Going forward,
people will judge us on economic growth, which will be the focus of
our next course of action," he said.
Admitting that the
controversy over the Minimum Alternative Tax (MAT) had hurt the
government's image, the adviser said it would not be imposed again as
the government has learnt from its mistake.
Observing that the
government could have done much more in its first year, Subramanian
said the number of stuck projects was coming down but there was not
much pick-up in new projects.
"In one year,
more could have been done but I think structural reforms agenda has
been substantial.Reduction in corruption is visible, as evident from
a clean and transparent auction of coal and spectrum; liberalisation
of gold import regime, and reducing rents intrinsic to quantitative
restrictions," he said.
Achievements during
the year gone by included cooperative and competitive federalism by
adopting the 14th Finance Commission's recommendations and creating
Niti Aayog in place of Planning Commission, he said.
"The government
is close to securing political agreement to launch the game-changing
Goods and Services Taxes (GST) regime from next fiscal," he
said.
Referring to the
creation of 150 million Pradhan Mantri Jan Dhan accounts since August
2014 for financial inclusion, he said similarly initiating a
comprehensive social security through pension, life insurance and
accident schemes reflected the government's commitment to growth with
equity.
"As the
macro-economic situation has seen a massive turnaround, more can be
done in the next 18 months, while 'Make in India' will be a long-term
strategy to make the country's economy competitive," he said.
Noting that
structural reforms would take time to influence growth, the former
IMF economist said that policy support was crucial over short run,
especially for consumption and public and private investments.
On the flip side,
private investment continued to be weak as a legacy of the boom
period, while declining exports was a cause for concern, as
merchandise trade was yet to recover.
"We also need
to find ways of relieving the distress in rural incomes. MNREGA, crop
insurance, minimum support price will help improve farmers' income,"
Subramanian noted.
He cautioned that
interest rate cuts in China and elsewhere would make Indian exports
and manufacturing uncompetitive.