Sonia stresses ‘compulsions’, Cong rallies behind reforms

FP

Earlier, seeking to convince his party colleagues about the need for economic reforms, the Prime Minister said the government has often been criticised for its excessive focus on growth rate. While accelerating economic growth rate is not an end in itself, he said that it is necessary to get resources for welfare schemes like NREGS, midday meal scheme, etc.

Stating that fiscal deficit is a major problem in the path of fast economic growth, the PM said efforts have to be made to "reduce government expenditure" and increase government revenue. Subsidies are a crucial component of government expenditure as the country spends 3.2 per cent of the GDP on food, fertiliser and petroleum subsidies.

Flagging the issue of constraints on the supply side in the form of delayed "clearances" and cheap credit, the PM advocated the need to create a conducive environment for both domestic and foreign investors by expediting decisions. "Many a time, complaints are received that forest and environmental regulations have become an obstacle to development. The need is to progress while maintaining balance," he said.

Seeking to dispel the notion about her ministry blocking investment inflows, especially in the wake of her objection to the National Investment Board, environment minister Jayanthi Natarajan said the MoEF had given clearance for 2.10 lakh MW power projects but they were still stalled. She is reported to have said that while she is not against investment, her ministry's regulatory powers should not be taken away.

Chidambaram was reported to have dwelt at length on the reasons for the current economic situation. "In matters of economic reforms, we have to be careful that there should be no controversy," Congress general secretary Janardan Dwivedi quoted him as saying.

The Finance Minister was also reported to have spelt out the steps being taken to overcome the sense of stagnation in the economy, including fiscal consolidation, stabilising the value of rupee and attracting foreign investments.

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