statesman news service
NEW DELHI, 13 JUNE: On the last year of its second term and facing a disappointed electorate in the 2014 Lok Sabha polls over the general state of the economy, the Congress-led UPA government today announced that it will accelerate reforms and spur investments in critical sectors.
The government’s announcement came in the wake of stalled reforms and stuck pro-liberalisation legislation for want of consensus with allies as well as the Opposition. Significantly it also came a day after official data showed India’s industrial production registered its lowest growth in several years in April this year.
The announcement was made at a Press conference here by the Union finance minister, Mr P Chidambaram, who said the government will initiate a number of reforms such as lifting the cap on foreign direct investment in the coming weeks to spur growth.
“I expect a number of decisions in the next few days and weeks. In June, you can expect a number of decisions taken and implemented that will accelerate reforms and spur investments in critical sectors,” he said. The reforms will include allowing foreign direct investment (FDI) in various sectors, including Defence and skill development, and rationalisation of coal and gas prices, he said.
Mr Chidambaram also indicated that the government is likely to announce measures to ensure proper supply of coal to power plants.
Stressing that economic reforms were not a one-day game, Mr Chidambaram asked investors to take a long-term view on India’s growth story.
“My appeal to everyone is that we have to take a long term view ~ what’s happening in India and what will be the results we will achieve over a period of time,” he said.
On the continuing slide in rupee value, Mr Chidambaram said there was no need to panic and the rupee will stabilise in the next few days.
Don’t buy gold
In somewhat controversial remarks, he also asked people to resist the temptation of buying gold for the sake of the health of the economy. “I once again appeal to everyone to resist the temptation to buy gold. This will show positive impact on every aspect of the Indian economy.”
The finance minister said reduction in gold imports would have a big positive impact on vital macro-economic indicators, especially the current account deficit, trade deficit and inflation.
“People think that they are buying gold in rupees, actually they are buying gold in dollars… If for one year there are no gold imports, it will change the current account deficit story of the country,” he said.
Mr Chidambaram said he was confident of achieving the target of Rs 40,000 crore from stake sale in public sector firms in the current fiscal.
He said the government plans to sell 10 per cent stake in Coal India that would fetch around Rs 20,000 crore to the exchequer.
The finance minister said the disinvestment proceeds will be used to finance expansion plans of other public sector undertakings, especially banks.