Justifying industry concerns, the Finance Minister, Mr Pranab Mukherjee, on Saturday conceded that tightening of the monetary measures for long may end up moderating the growth. He, however, is confident of repeating the growth performance of 2010-11 in the current year.
Addressing a seminar on 20 years of economic reforms organised by the CII, Mr Mukherjee described inflation as a major challenge in the short-term. At the same time, he charted out a six-point agenda for reforms to continue.
“The management of inflationary pressures in the medium-term is critically dependent on an improvement in the supply response of agriculture to the expanding domestic demand and in the short-term by taking steps to moderate aggregate demand,” he said.
In order to check inflation, the RBI is continuously increasing the rates, with the latest hike of 50 basis points. Industry has apprehended that such an aggression is hurting them and manufacturing growth may slow down.
Though the Finance Minister did not give any hint for relief from rate hike in near term, he did compensate them by showing the Government's commitment towards reforms. Explaining his agenda, he emphasised for improving economic efficiency and spreading the benefit of growth equitably. The Finance Minister also called for education with special thrust on skill formation.
Mr Mukherjee felt that issues like land acquisition, environment clearance and resettlement and rehabilitation have to be addressed satisfactorily with a view of de-risking development and meeting environmental concerns.
Commenting on Indian entrepreneurs investing more abroad than India, he said, “if the Opposition and ruling parties work together to get major reforms bills cleared, then our new tag line would be ‘Tata World, welcome sweet home'.”