Will alter policies to accelerate growth: PM

MMS

In a strong affirmation of the Centre's resolve to continue with its reforms drive, Prime Minister Manmohan Singh today said his government is committed to altering the present policy environment to push economic growth back to the 8-9 per cent path.

Throwing his weight behind some of the government's recent reform measures, including the much-debated decision to allow FDI in multi-brand retail, Singh promised to allay concerns raised by the industry on the general anti-avoidance rules (GAAR) and on issues relating to taxation of the information technology sector.

In an address to industry leaders at FICCI's annual general meeting here, Singh accorded high priority to the finalisation of the direct taxes code (DTC) and the goods and services tax (GST) measures.

Admitting that a year or two of "excessive pessimism at home" has hurt the growth process, he said: "We are today seized of the need to step up investment and savings rates commensurate with the requirements of 8-9 per cent GDP growth in the Twelfth Five Year Plan... The steps that we have taken recently are only the beginning of a process to revive our economy and take it back to its trend growth rate of 8 to 9 per cent."

Justifying the government's decision to allow FDI in multi-brand retail, Singh said that those opposing the move are "either ignorant of global realities or are constrained by out-dated ideologies. For example, when I hear the debate on foreign direct investment in retail, what I hear are arguments against large-scale organised retail, and not against foreign direct investment in retail".

Assuring the industry of two ambitious tax reforms, the DTC and GST, Singh said that corporates must also own up their responsibility in supporting affirmative action designed to provide employment opportunities for under-privileged sections.

The Prime Minister also reiterated the government's commitment to bring down the high fiscal deficit to 5.3 per cent of GDP this year and lowering it to 3 per cent of GDP by 2016-17.

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