New Delhi: The UPA government is stepping on the reforms pedal and Finance Minister P Chidambaram said on Friday that the current economic crisis calls for bold, innovative steps to boost FDI inflows and turn the economy around. "I am confident that the steps we have taken, and some more steps that we will take in the next few weeks, will help turn the Indian economy around," Chidambaram said while addressing the Delhi Economics Conclave.
Chidambaram added that some more measures to be taken to boost investments and also aim to have a stable, non- adversarial tax regime. In the recent past, government has taken a number of measures, including opening up of FDI in multi-brand retail and hiking foreign investment cap in the aviation sector, to boost economic growth and restore investor confidence.
On Thursday, the Union Cabinet cleared setting up of Cabinet Committee of Investment to fast-track large project entailing investment of over Rs 1,000 crore. "It is too early to say whether the measures have begun to bear fruit, although it is our expectation that they will do so," Chidambaram said.
Concerned over sticky retail inflation, the Minister said, "There is no reason at all to become complacent". While headline inflation has moderated to 7.45 per cent in October, the retail inflation remains high at 9.90 per cent. The economic growth in the first half of the fiscal fell to 5.4 per cent, against 7.3 per cent in the corresponding period a year ago. The growth in 2011-12 fell to a nine-year low of 6.5 per cent. In the current fiscal RBI expects it to be around 5.8 per cent.
Stressing that the present challenge is different from the one faced in 2008, Chidambaram said, "The present challenge calls for bold and innovative measures". While in 2008-09 imports had reduced considerably due to fall in international crude oil prices, the situation at present is different as, while exports are declining, imports continue to remain high mainly on account of crude and gold.
He said with rapid globalisation of economy, external sector is becoming more vulnerable. The Finance Minister also asked Asian G20 member nations and Russia to increase resource base of Asian Development Bank for development of the region.
With Additional Inputs from PTI