Come what may, reforms to stay
1 Sept 2013 5:07 AM IST
After concluding United Progressive Alliance’s socialist agenda, Prime Minister Manmohan Singh on Friday advocated the need for stronger reforms in order to restore the economic growth in the country. ‘The easy reforms of the past have been done, we have the more difficult reforms to do such as reduction of subsidies, insurance and pension sector reforms, eliminating bureaucratic red tape and implementing goods and services tax,’ said prime minister Manmohan Singh in Lok Sabha.
The prime minister said there is need for a political consensus in order to bring the economy back on track. ‘Reforms such as the Goods and Services Tax, which everyone agrees is essential to restore growth, require states to come to an agreement. We need to forge consensus on such vital issues. I urge political parties to work towards this end and to join in the government’s efforts to put the economy back on the path of stable and sustainable growth,’ stated the prime minister.
Ruling out reversing the process of reforms, the prime minister said India has grown as an open economy and people have benefited from it so there is no question of reversing these policies just because there is some turbulence in capital and currency markets. ‘The sudden decline in the exchange rate is certainly a shock, but we will address this through other measures, not through capital controls,’ he said.
The prime minister attributed the sudden depreciation of Rupee to the US central bank tapering its quantitative easing as the US economy was recovering and tensions over Syria. ‘This led to a reversal of capital flows to emerging economies which are now sharply pulling down not just the Rupee, but also the Brazilian Real, the Turkish Lira, the Indonesian Rupiah, the South African Rand ,’ said the Prime Minister.
He added there may be short term shocks to Indian economy and we need to face them. ‘That is the reality of a globalised economy, whose benefits we have reaped in the last 15 to 20 years,’ he said.
The Prime Minister also said that the Rupee has been hit because of our large current account deficit and some other domestic factors. ‘We intend to act to reduce the current account deficit and bring about an improvement in the economy,’ stated Singh in Lok Sabha. The Prime Minister said the Reserve Bank of India and the government have taken a number of steps to stabilize the rupee.
The Prime minister was of the opinion that the country needs to reduce its appetite for gold, economise in the use of petroleum products. Singh said that the government is confident that current account deficit will be lowered to $70 billion and the medium term objective was to reduce the current account deficit to 2.5 per cent of our GDP.
The prime minister said there is need for a political consensus in order to bring the economy back on track. ‘Reforms such as the Goods and Services Tax, which everyone agrees is essential to restore growth, require states to come to an agreement. We need to forge consensus on such vital issues. I urge political parties to work towards this end and to join in the government’s efforts to put the economy back on the path of stable and sustainable growth,’ stated the prime minister.
Ruling out reversing the process of reforms, the prime minister said India has grown as an open economy and people have benefited from it so there is no question of reversing these policies just because there is some turbulence in capital and currency markets. ‘The sudden decline in the exchange rate is certainly a shock, but we will address this through other measures, not through capital controls,’ he said.
The prime minister attributed the sudden depreciation of Rupee to the US central bank tapering its quantitative easing as the US economy was recovering and tensions over Syria. ‘This led to a reversal of capital flows to emerging economies which are now sharply pulling down not just the Rupee, but also the Brazilian Real, the Turkish Lira, the Indonesian Rupiah, the South African Rand ,’ said the Prime Minister.
He added there may be short term shocks to Indian economy and we need to face them. ‘That is the reality of a globalised economy, whose benefits we have reaped in the last 15 to 20 years,’ he said.
The Prime Minister also said that the Rupee has been hit because of our large current account deficit and some other domestic factors. ‘We intend to act to reduce the current account deficit and bring about an improvement in the economy,’ stated Singh in Lok Sabha. The Prime Minister said the Reserve Bank of India and the government have taken a number of steps to stabilize the rupee.
The Prime minister was of the opinion that the country needs to reduce its appetite for gold, economise in the use of petroleum products. Singh said that the government is confident that current account deficit will be lowered to $70 billion and the medium term objective was to reduce the current account deficit to 2.5 per cent of our GDP.
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