Difficult decisions needed to achieve 9 per cent growth: Manmohan Singh

[thakur_ritesh]

PTI | Mar 19, 2012, 07.29PM IST


NEW DELHI: Forced to put on hold key policy reforms including FDI in multi-brand retail, Prime Minister Manmohan Singh today said difficult decisions were needed to revert to 9 per cent growth trajectory as the path ahead is not easy.

"We grew at 9 per cent for five years before 2008 and I do believe that we can get back to that kind of growth rate provided we can agree on a number of difficult decisions," he said replying to the debate in the Lok Sabha on Motion of Thanks to the President for her address.

Although Singh did not elaborate on the difficult decisions, the critical policy actions on which the government has not been able to take any action because of political compulsions include opening of the multi-brand retail to foreign investment, deregulation of diesel prices, raising FDI cap in insurance sector and pension and tax reforms. Singh also sought support from political formations to raise economic growth rate saying "we need a broad-based national consensus covering all sections of political opinion represented in this august House."

He said that 12th Plan, to be placed before the National Development Council (NDC) around mid-year, will lay out a credible plan of action for faster, sustainable and more inclusive growth. "I do not wish to go into details, but only wish to remind the members that our path is not easy." Indian economy used to grow by over 9 per cent before the global financial meltdown pulled it down to 6.7 per cent in 2008-09. The growth in the current fiscal is likely to moderate to three-year low of 6.9 per cent, down from 8.4 per cent in the two preceding years. For the next fiscal, the government expects a growth of 7.6 per cent.

the difficult decisions that we have to take are made more difficult by the fact that we are a coalition government and we have to evolve policy keeping in mind the need to maintain a consensus," he said, adding the challenges came to fore after presentation of the Railway Budget. Railway Minister Dinesh Trivedi, belonging to UPA ally Trinamool Congress had to quit as his party leadership was not happy with the rail budget.

Referring to the difficult global economic situation, Singh said, "We are chartering our course through waters that are choppy for all countries today...The international economic environment that we face is highly uncertain. "...our own economic performance of about seven per cent growth -- though slower than what we had hoped -- must be regarded as commendable", he said, adding "we cannot view this as acceptable. We must strive to improve upon this in the next year and return as quickly as possible to a higher growth path...with reasonable price stability".

Though the government had initially projected a growth rate of 9 per cent for 2011-12, it has now been estimated at 6.9 per cent. Singh said developments in North Africa and West Asia have led to a steep increase in the prices of hydrocarbons and are adversely affecting fertilisers and food grains prices, besides impacting balance of payment position.

As regards the price situation, the Prime Minister said, inflation, which has remained high during the last two years had come under control but "we have to be vigilant."


Difficult decisions needed to achieve 9 per cent growth: Manmohan Singh - The Times of India

 

[Ray]

Dreams that are not in grips with the reality of the situation!

 

[sukhish]

no this time some of that dream will come true. they have taken allies on board now. they have to take some tough decisions.

 

[Ray]

Like raising the railway fare?

It is piffling if what Trivedi has enumerated that has to be done as per the Pitroda and the other report.

Govt has to also give money in shovelful if just one issue that plagues the Govt i.e. the Railways are to be efficient and safe.

 

[thakur_ritesh]

I am not sure of what the government will do or not do, but it is good the PM is pointing in the right direction. Will these words translate into action, I doubt, at least the past is not something that gives us confidence.

Multi-brand retail to foreign investment, deregulation of diesel prices, raising FDI cap in insurance sector and pension and tax reforms, GST, FDI in aviation, and so much more, the government needs to start working on a war footing if the economy has any chance of making it past the 9% mark.

Notice the change, there was a time the PM, FM and planning commission used to talk about 10% growth rate, but not any more.

 

[nrj]

I am not sure of what the government will do or not do, but it is good the PM is pointing in the right direction. Will these words translate into action, I doubt, at least the past is not something that gives us confidence.

Multi-brand retail to foreign investment, deregulation of diesel prices, raising FDI cap in insurance sector and pension and tax reforms, GST, FDI in aviation, and so much more, the government needs to start working on a war footing if the economy has any chance of making it past the 9% mark.

Notice the change, there was a time the PM, FM and planning commission used to talk about 10% growth rate, but not any more.

Saar, I think these reforms will get implemented one way or another. The political compulsions are overrated. National parties fear the loss of numbers. Its all arithmatic for them. But the growth is unstoppable. Be it NDA or UPA, they'll have to make way for implementation of liberalization 2.0. India is the only developing country which never witnessed Industrial revolution but still maintained 9% growth rate in last 5yrs. With new manufacturing policy seeing the day of light followed or preceded by labor reforms, India will get back on steady high GDP. UPA is delaying labor reforms for political gains before next LS polls as it will be a game-changer as far as lower working population is concerned.

We'll wake up to a day with 2 possibilities, either a national party will ask leftist house members to take a walk as major policy changes are announced, or there will be repeat of 1991 when we simply don't have options as deficit rocks the sky opening doors to national bankruptcy. No political party can ensure stable economic growth with protectionist heads controlling south block. Its just not simply possible. I wait to see next manifesto of national parties as far as economic measures as concerned. We live in a pretty unprofessional state where Delhi-contenders do not announce their agenda to seek power at least a year or 2 before actual polls. It not only helps voters to make a logical choice for them but also chalks out predetermined itinerary of govt functioning. Rather what we end up with is a negative campaigning with evening amusement of mudslinging.

Current Govt has unfortunately woken up too late on reforms agenda. Situation is volatile, UPA will collapse for early polls or survive for another 2yrs. And if it does survive, we can not do anything more than hope that PM will go ahead & implement necessary measures no matter what, considering that this is the same man who threatened to resign in 2008 if core UPA does not agree on nuclear deal.

 

[thakur_ritesh]

Nrj,

The important thing is, we as a democracy need to mature up.

It is the responsibility of the ruling party/coalition, the principal opposition party/coalition and like minded parties to join hands on issues which pertain to national interest, economy being one such, and at no cost do any sort of politics around that. Our problem is and as you point out, we tend to get into cheap vote bank politics, where the larger good of the country is forgotten, but there should be certain issues where no compromise should be made, come what may.

Frame a national policy on certain important issues where the ruling party/coalition, and lead opposition party/coalition come together and put their minds together to work out a consensus, and in a time bound manner. This should be continuous and fast track process.

Problem is, when the congress is in opposition, they oppose because they are in opposition, ditto for BJP. And more importantly when the opposition joins hands with the party in power, then due recognition needs to be given, which unfortunately isn't the case with us, where it is considered more important to score numbers than present the achievement as a collective accomplishment.

As far as UPA II is concerned, I am not sure what would be best, their continuing or early elections. Early elections would be a disaster in continuation if a fractured parl is thrown up, and if the UPA II continues the way it has, it would be no less a disaster.

I see it more as a case of leadership crisis. If Sonia Gandhi supports MMS, FM, at el on an issue like economy to no ends, there will be no stopping them, unfortunately that support remains elusive. It is on issues like these that Rahul Gandhi needs to take lead in, if he can do this much, he wont need PR news channels for the image makeover he longs for.

 

[Godless-Kafir]

Well Vajpayee with 20 allies took major and stern policy decisions like disinvestment, nuclear tests etc., MMS is a fool and when he says tough decisions are to be taken then that means he cant take. When has he ever gone against the grain?

 

[Ray]

I am not sure of what the government will do or not do, but it is good the PM is pointing in the right direction. Will these words translate into action,

Everyone knows he is posturing.

Why do it and make a fool of yourself?

It diminishes the chances in the next elections!

It appears that the Congress is seized with a wish to go into permanent electoral oblivion!

 

[Ray]

When a balanced and sober chap like Jay Panda also indicates that the UPA (Congress) consults none before announcing a policy, I will tend to believe it.

There is no doubt that the Congress feels arrogance is the only way to beat the spine chilling grip of insecurity.

 

[sky]

Well Vajpayee with 20 allies took major and stern policy decisions like disinvestment, nuclear tests etc., MMS is a fool and when he says tough decisions are to be taken then that means he cant take. When has he ever gone against the grain?

When mms is credited for starting economic liberalisation back in 1990,it was a huge bonus when he became PM.I think the UPA should dissolve parliament and call fresh election's citing an new mandate is required from the people.

It's better to fail trying then holding on to power just to enrich your cronies .