Visit Indian Travel Sites
Goa,
Kerala,
Tamil Nadu,
Andhra Pradesh,
Delhi,
Rajasthan,
Uttar Pradesh,
Himachal Pradesh,
Assam,
Sikkim,
Madhya Pradesh,
Jammu & Kashmir
Karnataka
|
Stimulus to continue till robust recovery takes place: Pranab | The Indian economy has been able to fare well in spite of the adverse impact of the global economic crisis, due to the strength of its domestic demand, said Finance Minister
Pranab Mukherjee on Tuesday. Addressing a session titled "Post-Crisis Economic
Order: How can Free Market and Control be Balanced?" at the 25th India Economic
Summit, jointly organized by World Economic Forum and Confederation of Indian
Industry in New Delhi, Mukherjee said the stimulus packages provided by the government
have been aimed at increasing domestic demand in the face of a global recession.
This stimulus needs to be maintained for some more time till a robust recovery
in developed nations takes place, he said, pointing to the continuous decline
in exports that has been experienced by the country since September 2008. Developed
markets constitute 60 per cent of our export market and it is not easy to diversify
in the short-term, he added. He said that GDP growth will return to the nine to
ten percent growth trajectory by 2012. In the short-term, the lack of external
demand and the poor performance of agriculture may be a constraint to achieving
a higher growth rate. He outlined three areas as his priority for keeping domestic
demand strong in the near-term: innovation in agriculture, investment in infrastructure
and maintaining an appropriate fiscal and monetary policy. He said that while
he had significantly increased allocations to all flagship schemes for rural areas,
infrastructure growth would be funded through the PPP route. He said that fiscal
consolidation is imperative for India in the medium term and that he had set a
target of reducing the fiscal deficit from 6.8% of GDP in the current year to
4.0% by 2011-12. While the RBI has successfully been able to raise resources for
the government without crowding out private sector credit, such tight-rope walking
cannot continue. He expressed optimism that the collective determination of global
leaders will address the problems faced by the international community so that
the multilateral negotiations on trade and climate change can be successfully
concluded. Meanwhile, the issues of stimulus and exit strategy as well as the
new international financial architecture were being worked on by the G-20. Venu
Srinivasan, President, CII, and Chairman and Managing Dierctor, TVS Motor Company,
India, applauded the visionary measures taken by the Minister against the challenging
backdrop of the global meltdown. He pointed out important measures that are being
implemented, such as the Goods and Service Tax (GST) and Direct Tax Code, which
will go a long way in simplification of tax regime. Talking about regulations,
Srinivasan said that both an overly regulated market and one without regulations
can stifle growth, and therefore CII believes in maintaining a balance between
the two. Chanda Kochhar, Managing Director and Chief Executive Officer, ICICI
Bank, India; and Co-Chairman of the India Economic Summit, highlighted factors
that contributed to economic stability in India amidst the worst crisis since
the Great Depression. She said that stable and timely government policies, self
regulation by Indian banks and the fact that Indian consumers were not overly
leveraged, contributed to stability of the economy. Kochhar pointed out that,
going forward, India's growth story will be driven both by domestic consumption
and investment, as long standing investment projects, which were held in abeyance,
are again becoming operational. She concluded by commending the Finance Minister
on his message that protectionism cannot be the answer to the problems being faced
by the global economy today. |
|
|
|
|
|