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The Tyler Group Review Articles

Government taking corrective action to Indias slowdown

The Tyler Group Review Articles - Prime Minister Manmohan Singh carried a contrarian note and warned India Inc of unjustified pessimism even as he guaranteed the industry of faster regulatory clearances, mitigation of inter-ministerial disagreements and a comprehensive review of the foreign investment policy to restore growth to its earlier trajectory. The Prime Minister made a case for prompt and critical actions to realize 8 per cent economic growth yet terming the 5 per cent GDP expansion as clearly disappointing. PM agreed that the role of the government is essential to take growth back to 8%. India was growing above 9% before financial crisis, he said. He further added that the slowdown is partially because of global factors and the government would take corrective actions.

PM Singh said it was nice to see that the industry had realized that the government has a role. That was when reminding the industry of the undue optimism in 2007 when the industry claimed that it grew irrespective of the government in the pre-Lehman crisis. High fiscal deficit, current account deficit, inflationary pressures were macro problems that country was facing, he said previous to outlining how the government is planning to overturn the investment ambiance. The PM address his first after Budget 2013 to the captains of industry at the annual general meet of CII. The annual general meet of CII is at the back of a slowing economy, high inflation and current account deficit.

Observing that the high fiscal deficit is unacceptable, Singh said We are determined to do everything possible to achieve the fiscal deficit target.

The government aims to bring down the fiscal deficit to 3 per cent of GDP by 2016-17, according to the road map.
PM Singh had advised the industry to let loose the animal spirits in mid 2012, when he implicit allege of the finance ministry before P Chidambaram transferred into North Block. The growth story that has taken a thrashing with a sub-6 per cent growth in the fiscal just completed and the government is presuming the peddle to restore growth.

Singh said that the government and industries are partners in progress and emphasized the need for more social responsibility by the companies.
PM said, India is experiencing a temporary downturn in economy and we will prove prophets of doom wrong. He said that the government financed a Current Account Deficit (CAD) of over $90 billion in 2012-13 without a loss in reserves.

On the other hand, the government is doing its part, working twice as hard through the cabinet committee on investments, this is headed by PM of course, and to continue through clearances and clear projects stuck in interministerial differences. The CCI is the governments newest decision making arm. It has cleaned projects worth Rs 40,000 core primarily in the infrastructure sector.
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