Search the Internet          Tips  Sites: Finance, Investment

PM unveils strategy for 8% GDP growth

Prime Minister Atal Bihari Vajpayee on Saturday exuded confidence in attaining an annual eight per cent economic growth during the Tenth Plan, saying India was among the six fastest growing economies in the world in the last two decades.

Addressing the meeting of his Economic Advisory Council, Vajpayee listed eight critical areas, which need to be addressed for pushing economic growth and said the growth strategy necessarily had to hinge on employment creation and speeding up economic reforms so that "India becomes a clear-cut market economy".

The prime minister said that although the government should withdraw from production barring in a few clearly specified strategic sectors, it must "retain and further strengthen its role in policy making, regulation and facilitation. We need to ensure that regulation of market is by competent and independent regulatory agencies".

"We shall take steps to remove several growth-hindering hurdles that have been placed in the name of environmental protection, which can be got rid of without harming the environment," Vajpayee assured.

The Economic Advisory Council meeting followed Vajpayee's interaction with industrialists at the meeting of the Council on Trade and Industry three days ago.

Emphasising that implementation of the policies was the first and foremost challenge for accelerating GDP growth rate to eight per cent and beyond, Vajpayee said: "Our government has shown that we are determined to bridge the gap between promise and performance."

Implementation of the new telecom policy, promotion of the information technology sector, progress on the National Highway Development Project as also the divestment initiative were a few examples of a model of good governance, he said, but cautioned "we are aware that a lot more needs to be done".

Vajpayee said the government had begun a comprehensive review of the current regulatory procedures, which impose significant transaction costs and delays in project implementation, adding that a high-level official working group under the industry secretary would soon recommend concrete steps to re-engineer the entire set of regulatory processes at the central, state and municipal levels.

At the same time, he assured that it would be the government's endeavour to ensure that "the poor and the unorganised sector have access to savings, credit and insurance services".

Stressing the need for reducing the overall fiscal deficit, Vajpayee said that the poverty alleviation strategy must include reduction and re-targeting of subsidies.

"Barring those who deserve a subsidy, we should develop a culture of making all others pay for what they use," he said.

Vajpayee regretted that nearly half of the power sold was not billed and much of what was billed was not collected.

"More or less this is true about higher education, public transport, municipal services and so on. No reform can succeed if this sad state of affairs persists," he cautioned, adding the nation was paying a heavy price in the form of slow and stunted development because citizens fail to pay.

Vajpayee announced that the government would soon launch an initiative for accelerated completion of Railway projects, which are both, critical and remunerative.

"If necessary, we will raise non-budgetary resources for this purpose. Putting Indian Railways on a path of faster growth is a fitting way to celebrate 150 proud years of this institution, that has contributed so much to the nation".

Emphasising on the goals of a 'Welfare State', Vajpayee said that broadening and deepening the scope of public-private partnership in education, healthcare and sanitation should be pursued within a new framework as responsibility for physical and social infrastructure should not be exclusive to government.

He said government has taken up the report 'Targeting 10 million employment opportunities per year', submitted by the Planning Commission member S P Gupta, adding the government would soon prepare an action plan to implement its salient recommendations.

Vajpayee stressed the need for ensuring employment-oriented growth and said: "The challenge of unemployment will become more acute as the youth segment of our demographic spectrum continues to expand in the coming years".

He said the long-term growth strategy should be closely aligned to a strategy on population and "our goal should be for total fertility rate to reach replacement levels within the time frame given in the National Population Policy".

In doing so, it should be ensured that a greater proportion of the population was of working age and the savings rates were increased further.

He pointed out that no major democracy barring Japan in the 1960s and 1970s has at any time matched India's growth performance in the last two decades.

"In particular, the service sector, which accounts for more than half of our GDP, has grown at 8.5 per cent annually over the past seven years," he said.

ALSO READ:
Govt to cut subsidies in phased manner: Jaswant
Service sector to drive India's GDP growth
More Money Headlines