Economic growth pessimism overdone, no policy paralysis: Pranab Mukherjee
NEW DELHI: Desperate to talk itself out of the drift that has swamped the government, the UPA on Wednesday sent out its pinch hitter, Finance Minister Pranab Mukherjee , to announce an end to the climate of 'pessimism' and say the economy was in fine fettle.
The meeting of the government's chief crisis manager with financial journalists
comes soon after Prime Minister Manmohan Singh met a group of editors. Both have been keen to stress that there is no 'policy paralysis'. The meeting of the government's chief crisis manager with financial journalists
Mukherjee said the perceived lack of progress on reforms was misplaced, stuck to his growth targets, blamed perceptions of a slowdown on global factors, and promised that inflation would cool by the end of the fiscal.
He also listed a series of decisions that various groups of ministers (GoM) had taken. Mukherjee himself heads most GoMs, many of which are empowered to take the final call on contentious issues without needing clearance from the cabinet, which is headed by the prime minister. "There is an impression that we have given up on reforms," he said, adding, "Whatever policy reforms or adjustments are required to attract investments will be taken."
Mukherjee finally cleared the air on important legislation that have been pending for long by saying the mining, food security and land acquisition bills are nearly ready and will be introduced in the monsoon session, which begins on August 1. He also pointed out that the government has cleared a number of coal and steel projects, and over a longer period, infrastructure investment is taking place.
Asked about the government's extremely high-profile engagement with Baba Ramdev, the finance minister said the government had tried to explain to him why demands like stopping the printing of currency notes of 100, 500 and 1,000 made no sense. It would need 20 times the existing printing capacity to cover all of India's currency notes with small denomination notes. "These points need to be communicated and that should not be construed as our weakness or trying to appease somebody," he said.
Mukherjee admitted progress may have been slow because the UPA government lacked a clear majority. "Coalition partners have to agree with the proposals or reform agenda. If we do not carry them along on the reform agenda, then legislative support will not be available."
He also dismissed concerns over the health of the economy and his management of the fiscal situation, saying raising an alarm so early in the year did not serve any purpose. This is the fourth month of fiscal year 2011-12. Mukherjee said despite an uncertain global environment, the economy would grow strongly, driven by robust consumer demand and buoyant exports. He stuck to his growth target of 8.5% with a variation of 0.25% around it.
"If you see what we have achieved, then there is no room for pessimism," he said, attributing signs of a slowdown to global factors. "We are not living in isolated world. We are a part of the global economy." The minister spoke about inflation, saying it had 'doggedly persisted' but expected it to cool down after the monsoon, and end the year at 6-7% against the current 8%-plus. On black money, an issue that has fired up people like Baba Ramdev, he said most countries woke up to the problem at the G20 meeting in Pittsburg in 2009.
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