Land Acquisition Biggest Hurdle to Business: Babus
Senior bureaucrats meet Cabinet secy Ajit Seth
Senior bureaucrats have flagged land acquisition as a major constraint to project implementation days before the BJP-led government headed by Narendra Modi takes over. Secretaries were called in a group of seven-eight during the presentation meeting taken by Cabinet secretary Ajit Seth on Tuesday and asked to list out key achievements, failures and the agenda of their ministries and departments for the next five years. “Land acquisition is a major constraint. Developmental projects have got hampered. The Act needs to be suitably revised or amended to boost manufacturing,” a government official present at the meeting said on the condition of anonymity. All departments have been asked to give a similar presentation to Modi after his swearing-in as prime minister on May 26. At the meeting chaired by Seth, a few departments also highlighted the lack of interministerial coordination that had led to a slowdown in decision-making on policy issues. “No ministry can work in isolation. The interministerial coordination failed in the previous government’s regime. It was taken up during the presentation,” said another official. The bureaucrats highlighted improvement in business sentiment and containing inflation and twin deficits as key focus areas for the economy. India needs to boost farm productivity and also allow free movement of perishables across states to ease food inflation that has emerged as a key challenge over the past few years, they said. India faced consistently high inflation during the UPA-II regime, averaging 7.14%, against 6% in the previous five years. The El Nino scare has posed fresh upside risks to inflation in the current fiscal, prompting senior officials to flag inflation management as a priority for the new government. Business sentiment needs a lift and government officials have emphasised on getting stalled projects off the ground. This will also help put growth back on track. The external sector remains vulnerable as India is expected to see an overflow of capital. Current account deficit was largely contained last year at about $36 billion from $86 billion in 201213 on account of gold import restrictions, but the curbs will have to be revisited soon, according to suggestions. Subsidy reforms and improving expenditure as part of fiscal consolidation is another area that needs attention. Getting the fisc back on track will aid the central bank in easing lending rates. The commerce department raised the need to increase India’s share in the world trade and push exports. Exports in 2013-14 stood at $312.35 billion, falling short of the targeted $325 billion. Overseas shipments stood at $300.4 billion in 2012-13 and $307 billion in 2011-12. “There is a need to restructure the export promotion schemes by making them less dependent on government support to be WTO compliant,” said another official present at the meeting. India is ranked 13 among exporting countries but accounts for less than 2% in the world trade. For example, textiles sector reportedly crossed the 3.5% share in the global market and the country will no longer be able to provide export subsidies to the sector. Commerce department is working on the foreign trade policy 201419 with a thrust on non-fiscal incentives and perking services exports. “The need for subsidy reforms and improving farm productivity were also pointed out during the meeting,” an official said. Industry ministry pointed out the need for single-window clearances to boost manufacturing and liberalising FDI regime for defence, railways, ecommerce and construction. “We also emphasised on building smart cities, to revive manufacturing,” an official said.
Business sentiment needs a lift and government officials have emphasised on getting stalled projects off the ground