More FDI reforms on anvil: PM

July 19, 2013 11:33 am

Prime Minister Manmohan Singh today asked the industry leaders to shun negative sentiments, assuring them that government will not leave any stone unturned to ensure that the economy rebounds.”I appeal to each one of you not to be overcome by negative sentiments. We should stay the course…,” he told captains of the industry while inaugurating 92nd Annual Session of The Associated Chambers of Commerce and Industry of India (ASSOCHAM) in New Delhi.He said while the economic growth this year is likely to be lower than 6.5 per cent target set at the time of budget, “What is important is that the economy should turn around from five per cent last year. There is a very good chance that we can achieve that with good agriculture performance and the effect of various actions that we are taking on infrastructure,” said Dr. Singh.Referring to the recent liberalisation in foreign direct investment (FDI), the prime minister said, “More FDI reforms are on the anvil.”Allaying concerns over interest rates, the prime minister said the recent steps taken by the Reserve Bank of India (RBI) on the rupee front were to stabilise the market expectations. “These steps are not meant to signal an increase in the long term interest rates. They are designed to contain speculative pressure on the currency. Once these short-term pressures have been contained, as I expect they will be, the RBI can even consider reversing these pressures,” he said.The prime minister also said that while Indian economy is going through difficult times, his government is committed to brining the current account deficit under control by addressing both demand and supply side problems. While on the demand side measures have been taken to contain gold imports. The government will continue adjusting prices of petroleum products “to progressively eliminate under recoveries.”He said the government will use all policy instruments-fiscal, monetary and supply side interventions to ensure that the Current Account Deficit (CAD) declines further overtime. He expected that CAD in the current fiscal will be much lower than 4.7 per cent recorded last year.Listing various recent steps taken by the government to revive the investor confidence the prime minister said several initiatives are being pursued to boost infrastructure. These include setting up of major ports in Andhra Pradesh and West Bengal, new airports in Navi Mumbai, Juhu, Goa, Pune and Kannur. Small airports are being built at other 50 locations aswell.The prime minister said that while the economy has slowed down recently, the average growth rate in the eight years of the UPA government from 2004-05 to 2012-13 was 8.2 per cent, much better than 5.7 per cent reached in the previous eight years.