High fis­cal deficit de­ter­rent for in­vest­ment: In­dian PM

The Pak Banker - - Front Page -

MUM­BAI

Hold­ing that “high” fis­cal deficit is a de­ter­rent for do­mes­tic and for­eign in­vest­ments, Prime Min­is­ter Man­mo­han Singh on Thurs­day said the gov­ern­ment will have to over­come con­straints to achieve a tar­get of nearly $1 tril­lion in­vest­ment in in­fra­struc­ture sec­tors.

Con­scious of the fact that the gov­ern­ment was work­ing “against the po­lit­i­cal cal­en­dar”, he called for a com­mon un­der­stand­ing to work out mech­a­nisms and re­me­dial mea­sures to tackle these “crit­i­cal de­fi­cien­cies on a pri­or­ity ba­sis”.

Fuel sup­ply ar­range­ments, se­cu­rity and en­vi­ron­men­tal clear­ances and fi­nanc­ing dif­fi­cul­ties were among the “con­straints” in achiev­ing a 12th Plan in­fra­struc­ture in­vest­ment tar­get, he said.

The Prime Min­is­ter was mak­ing his open­ing re­marks at the first meet­ing of the re­con­sti­tuted Coun­cil of Min­is­ters to share with them “a few thoughts” on the agenda of the gov­ern­ment.

“My own view is that while we need not be un­duly gloomy about our prospects, we cer­tainly need to re­dou­ble our re­solve to meet the chal­lenges be­fore us and rise to the task of gov­er­nance,” he said.

He re­called the achieve­ments of UPA gov­ern­ment in the last nine years in so­cial and eco­nomic pol­icy mak­ing, in­clud­ing flag­ship schemes like MNREGA and Aad­har num­ber, com­bined with ro­bust eco­nomic growth had helped en­hanced so­cial sec­tor spend­ing.

“While we should take jus­ti­fi­able pride in our suc­cesses, it is im­por­tant to recog­nise that we are now also ex­pe­ri­enc­ing the fall­out of dif­fi­cult eco­nomic con­di­tions world­wide.

“As a re­sult, our growth has de­cel­er­ated, our ex­ports have fallen and our fis­cal deficits are ex­pand­ing. Of par­tic­u­lar con­cern is the fis­cal deficit, which is too high and acts as a de­ter­rent for do­mes­tic and for­eign in­vest­ment,” he said.

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