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BUSINESS
Restoring growth should be top priority of Govt
By
Devajit Mahanta
Dr Manmohan Singh is the first Prime Minister after Jawaharlal Nehru
to be returned to office after completing a full five-year term. Just after
taking oath of office and secrecy on 21 May he said that his government’s
focus will be on restoring the economy and ensure inclusive growth.
People from every field, starting from insurance, education, retailer’s,
even builders, are expecting the announcement of a fresh economic stimulus
within the first 100 days, as per the election campaign commitment of Dr
Singh to pull the economy from the economic meltdown. This stimulus should,
however, be reform stimulus than being another fiscal stimulus. Reforms
that were stuck in the previous term must be pushed through. Apart from
that, the new government will have to adopt both short-term and long-term
measures to arrest the ongoing slowdown and boost the economy.
Finance Minister Pranab Mukherjee said on May 24 that the Budget for
2009-10 will be presented in the first week of July and the sectors hit
badly by global financial crisis would be addressed. The Indian IT sector
also expects some more from the new Government in the Budget. The Indian IT
sector, which is battling with recession and protectionism by Barack Obama,
seeks growth through extension of tax benefits, particularly for small and
medium enterprises (SME) and renewal of science and technology
infrastructure to attract and retain the best talents from India and
abroad.
As anticipated, a strong UPA victory has already meant favourable outcome
for the capital market and the investors believe that the “stable
government” at the Centre will bring new developmental reforms. The stock
market reacted by recording a 20 percent upward rally on May 18 and
compelled the BSE and the NSE to halt trading for the day for the first
time. The circuit breaker was applied twice on that day.
Assurance of internal security and effective ways of dealing with the
threat of terrorism and extremism should be the topmost priority for the
UPA government.
The new government should, moreover, take the initiative with States to
ensure implementation of social welfare agenda like National Rural
Employment Guarantee Act, Rural Health Mission, Urban Renewal Mission and
Programmes, which targeted the poor among minorities and backward sections.
The growth rate has slackened from a peak of 9.7 percent in 2006-07. And
there can’t be hope to touch even 6.5 percent in the current financial year
unless the new government acts with a sense of urgency, especially in the
first few months. The last Congress-led government was unable to go ahead
with its reforms agenda on account of the dependence on the Left parties.
With the country struggling through global economic crisis, the big task
before the new UPA government is restoring the growth and its growth
momentum.
Readers can send their feedback at devajitmahanta@gmail.com
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