Restoring economy priority; divestment, fin reforms to be key

New Delhi, June 4 (PTI) Without the Left crutches this
time, the Indian Government Thursday unveiled its reforms plan
in the financial sector and PSU disinvestment, coupled with
measures to tackle the economic slowdown by focusing on
sectors hit by global recession and boosting public
investment.

While pursuing reforms, the pension and financial sectors
and disinvestment in Public Sector Undertakings (PSUs) would
be the priority areas for the United Progressive Alliance
(UPA) government.

"The current financial year is expected to see a slowing
down of growth on account of the global recession ... Our
immediate priority must be to focus on management of the
economy that will counter the effect of the global slowdown by
a combination of sectoral and macro-level policies," India's
President Pratibha Patil said in her address to Parliament.

Her address, presenting the agenda of the new Government,
said the focus would be on adversely-affected sectors like
infrastructure, exports, small and medium enterprises, and
housing to restore the growth momentum.

As promised by the Congress party, the government would
enact a new law providing for 25 kg of rice and wheat per
month at Rs 3 a kg to all families below the poverty line
(BPL).

"This legislation will also be used to bring about
broader systemic reforms in the Public Distribution System,"
she said.

On illegal money stashed abroad, the President said the
government was fully seized of the issue. "It will vigorously
pursue all necessary steps in coordination with the countries
concerned," Patil added.

The Bharatiya Janata Party (BJP) and the Communist Party
of India-Marxist (CPI-M) had made black money parked abroad by
Indians an election issue. The issue had also landed in the
Supreme Court of India, where the government had said that it
had taken expeditious measures to tackle it.

Patil said the government was committed to achieving high
growth with low inflation, particularly in relation to prices
of essential food items.

"My government is firmly maintaining high growth with low
inflation, particularly in relation to prices of essential
agricultural and industrial commodities," she said.

According top priority to bring the economy back on a
high growth trajectory, the President said the measures would
include expansion in public investment in infrastructure
sectors, besides encouraging public-private partnerships.

"Financing the investment will be a critical constraint
and my government is determined to ensure that innovative
steps are taken in this area, consistent with medium term
strategy of prudent fiscal management," she added.

After growing by an average of 9 per cent in the first
four years of the previous United Progressive Alliance (UPA)
regime, growth slowed down to 6.7 per cent in 2008-09. In the
current year also, the economy is expected to grow at a slower
pace.

Noting that the country has benefited from large foreign
investment flows, the President said foreign direct investment
(FDI) needs to be encouraged through an appropriate policy
regime.

"There is also a need to augment resources in the
banking and insurance sectors in order to permit them to serve
the needs of society better," she said.

The Government, she added, will recapitalise the public
sector banks and also bring in legislation to establish a
regulator for the pension sector.

On disinvestment, she said every citizen has a right
to own shares of public sector undertakings.

"My Government will develop a roadmap for listing and
people-ownership of public sector undertakings while ensuring
that the Government equity does not fall below 51 per cent,"
the President said.

With regard to tax reforms, the government would pursue
implementation of Goods and Service Tax (GST) replacing excise
duty and service tax at the Central level and VAT at the state
level, she said. PTI TEAM
RAI