Pranab sees reforms, rejects policy paralysis charge
WASHINGTON AS United Progressive Alliance (UPA) government desperately fights the perception of a policy paralysis, Finance Minister Pranab Mukherjee dismisses it with equal vehemence contending that the coalition was set on achieving higher economic growth.
Unfazed by criticism from within and outside and some controversial comments of Chief Economic Advisor Kaushik Basu on a freeze on reforms, he is confident about his priorities on economy and fighting inflation.
Basu’s comments created a storm back home in India with the opposition attacking the government and claiming that the Chief Economic Advisor had only spoken the truth.
“There is no question of policy paralysis in New Delhi.
I do not agree with them,” Mukherjee told PTI in an interview.
The Finance Minister was replying to apprehensions expressed by Corporate America over the perceived policy paralysis in the government and Basu’s comments that there may not be any big ticket reforms till elections in 2014.
Rejecting criticism about lack of decisions, Mukherjee contended that the government has taken a number of policy decisions in recent months.
“We have a new manufacturing policy, very recently.
It’s in operation. We have announced earlier that we will institute infrastructure debt fund. We have created infrastructure debt fund,” the minister, who is here to attend the annual Spring meeting of the IMF and the World Bank, said.
“We announced that we shall make easy access to commercial borrowing. Series of measures for easy access to commercial borrowing have been done. I do not agree with their perception with the so called policy paralysis. There is no policy paralysis,” Mukherjee said.
The Finance Minister said the government has set its sight on achieving the goal of putting back the economy on higher growth path and control inflation.
“My first priority is to bring back the economy in higher growth path and to control inflation,” Mukherjee said, adding that even an inflation of six to seven per cent is too high for him.
“Of course inflation has increased that is seasonal.
Third is to consolidate the fiscal situation. Fiscal deficit is high. So fiscal consolidation is to be achieved, inflation has to be moderated, high growth rate to be achieved. These are to be the priorities of the Finance Minister,” he said.
Time and again Mukherjee has been expressing his concern over the increasing inflation.
“On agricultural supply constraints, we have taken steps in budget we announced certain measures so that with higher production of those commodities which require, which are in short supply with the removal of that supply constraints it would be possible to reduce the inflationary pressure,” he said.
“From the demand side, three consecutive years, we enhanced the interest rate. So excess liquidity has been mopped up from the market, and these are the situation that always ought to be kept under watch.
“If we can achieve fiscal consolidation that will also have an impact on the inflation, inflation would be reduced,”