New Delhi: Prime
Minister Manmohan Singh Saturday defended the policy reforms
unveiled by his government, and said those were necessary to
revive economic growth, improve the investment climate and boost
And he hoped the Indian economy battling a slowdown would rebound
in the second half of the current fiscal.
"Our immediate priority must be to orchestrate a rebound in the
second half of the current year. We should then try to accelerate
growth to reach around 9 percent by the end of the Plan period,"
Manmohan Singh said, warning that a prolonged "policy logjam"
could slow economic growth to 5 percent.
"It will take courage and some risks but it should be our
endeavour to ensure that it succeeds. The country deserves no
less," Singh said at the meeting of the full Planning Commission,
called to finalise the country's 12th Five-Year (2012-17) Plan.
In what is viewed as big bang reforms, the government a day
earlier opened way for FDI in multi-brand retail, allowed foreign
airlines to buy stakes in local carriers, and raised the FDI cap
for broadcast carriers.
"To achieve the target of 8.2 percent growth (contained in a new
five-year economic plan), we need to revive investment in the
economy. The investment environment is therefore critical."
Singh also stressed the need to restore the fiscal health of the
"I believe we can attract financing we need, provided our fiscal
deficit is seen to be coming under control and the growth momentum
India's fiscal deficit is projected at 5.1 percent of gross
domestic product (GDP) in the current financial year, compared
with last year's 5.75 percent, which many believe could spin out
of control and touch 6 percent if the government does not curb its
expenditure on subsidies in fuel and fertilisers.
Viewed in that sense, according to the prime minister, Thursday's
increase in diesel prices is "an important step in the right
direction" as fuel prices in India are out of line with world
"Our fiscal deficit is too high and is attracting adverse comment
from analysts. It must be brought down over the medium term to
release domestic resources for productive deployment in the
He referred to falling exports and the current account deficit of
2.9 per cent of the GDP that the 12th Plan projects.
"This must be financed mainly through Foreign Direct Investment
and Foreign Institutional Investment flows, so that reliance on
external debt is contained," he said.
The prime minister called for speeding up the infrastructure
projects, which are crucial for removing supply bottlenecks that
constrain growth in other sectors.
Saying that the country needs around a trillion dollars of
investment in infrastructure, Singh said good infrastructure will
boost investor sentiment to raise the overall rate of investment.
Focussing on the agriculture sector, he said agriculture growth
needs to be accelerated to 4 percent.
At the end, the prime minister said, "Our objective is not just
growth of GDP, but growth that is inclusive and also sustainable."
'Mamata raps PM'
In an indirect attack at Prime Minister Manmohan Singh, Trinamool
Congress supremo and West Bengal Chief Minister Mamata Banerjee
Saturday said political leaders should be more bothered about the
common people rather than winning personal laurels.
Infuriated over the twin "anti-people" decisions - hike in diesel
prices and nod to FDI in retail - Banerjee, whose Trinamool
Congress is the United Progressive Alliance's second largest
constituent, reminded the Congress not to cross the "Lakshman
Rekha" (red line).
"We are not in favour of toppling the government. But they should
not forget the 'Lakshman Rekha' of the alliance. We will not agree
with any anti-people decisions. We have given 72-hour deadline to
rethink... if you roll back, it's good. But if not, then be ready
to face the consequences," she said, addressing a protest rally
"I don't agree with such economic reforms which are anti-people
because I believe in grass root reforms which concern the masses.
Leaders should stop taking decisions which help only four-five
people for gaining personal laurels from handful of people. It is
a matter of entire country," said Banerjee.
"Everybody should think about the common masses of the country
rather than the creamy section of the society. Because creamy
section makes one percent and common masses make the rest 99
percent of the population," she said.
The government Thursday announced a hike in diesel price by Rs.5 a
litre and capped supply of subsidised cooking gas cylinders per
family to six per year. The next day, it decided to allow up to 51
percent foreign direct investment (FDI) in multi-brand retail.
The entire industrial community has hailed Manmohan Singh's - who
has often been credited as the father of economic reforms of 1991
- bold decisions to allow FDI in retail FDI and to hike diesel