Finance minister Pranab Mukherjee on Wednesday said that the reforms process was on track and the Indian economy was doing well even as the US and Chinese economies were slowing down and a debt crisis had created uncertainty in Europe, despite the 2G scam involving DMK coalition partners A. Raja and Kanimozhi coming as a setback to the government.
"An impression had been created that the government was in a state of paralysis because of the scams but this was not the case as a lot of positive things have been taking place as well," the finance minister said during an interaction with journalists at North Block on Wednesday.
Mukherjee appeared worried over the image of the government having taken a battering as this could discourage foreign investors at a time when the country needs foreign direct investments (FDI) to boost its infrastructure.
The economic reforms process is moving ahead and bills to amend the banking and insurance acts to liberalise FDI have already been introduced in Parliament during the budget session, he said.
However, as the government did not have absolute majority it had to obtain a consensus within the coalition and take the opposition along, he said, adding that this process was taking time.
Similarly, the government had moved the new Land Acquisition Bill and the Pension Fund Regulatory Development Authority (PFRDA) Bill. The Food Security Bill had also been sent to a group of ministers for consideration, he added. Mukherjee said that as far as tax reforms are concerned, the new Direct Taxes Code would be implemented from April 2012 and the Constitution Amendment Bill for introducing the Goods and Services Tax (GST) was likely to be cleared during the winter session of Parliament.
"Reforms that required merely administrative action were being taken up in right earnest," he said. For instance, the guidelines for the infrastructure debt fund were being given the finishing touches and these would be in place soon to enable FDI to flow into the highways, ports and power sectors.
The finance minister said that India had emerged as one of the fastest growing economies of the world at a time when the Chinese manufacturing sector had grown at its slowest pace in eight months in June and exports had also started decelerating.
India's exports, on the other hand, had grown at a robust 35 per cent rate, despite the economic slowdown in the US, Europe and Japan, which had earlier accounted for about 60 per cent of the country's overseas market.
Mukherjee added that the diversification of markets had enabled India to clock a high growth rate. However, the minister cautioned that any major crisis in these large economies could impact the Indian economy as well.
He said that while India's industrial growth rate had slowed, any revision in the nine per cent target for the gross domestic product (GDP) growth rate would be made after the first quarter (April-June) figures come in some time in August.
Courtesy: Mail Today