Prime Minister Manmohan Singh said difficult decisions have to be taken both on spending and revenue mobilization, and called for determined measures to boost the climate for investment. The UPA government has faced stinging criticism for its handling of the economy. Growth in Asia’s third-largest economy has slowed while investors have stayed on the sidelines because of policy uncertainty and stalled economic reforms. Singh, who has faced the brunt of criticism over policy paralysis, reeled out the government’s achievements while releasing the report to the people on the third anniversary of his coalition. But he said despite real and solid achievements, there were uncertainties and a large unfinished agenda and the government would attend to these tasks firmly. “Difficult decisions have to be taken on both spending and revenue mobilization. Both the Centre and the states have to be fiscally responsible,” he said in his speech.
“We also have to remove implementation bottlenecks that are preventing large projects from getting off the ground. We have to quicken the pace of implementation of our policies of inclusive growth, particularly in the areas of health and education. We need to improve coordination between the Centre and states on important issues that face our country,” Singh said.
He said he was confident about proving the skeptics wrong but admitted that the economy faced some pressure points. “Some people have questioned the sustainability of our growth process. I am confident we will prove the skeptics wrong. I recognize that we face pressures on our balance of payments and that the fiscal situation requires careful management,” Singh said. “Determined measures are needed to boost the climate for industrial investment, both domestic and foreign,” prime minister said.
Singh said an urgent priority was to resolve issues relating to land acquisition, resettlement and the environment. “We need to strengthen our food security system by building more storage capacity. We must address the scourge of malnutrition through multi-dimensional interventions. We need to scale up our skill development programme,” Singh said but did not outline any specific steps that the government was planning to address these shortcomings.
In its report, the government said slowdown of economic growth to 6.9% in 2011-12 could be attributed to the global economic slowdown and tight monetary policy to tame inflation. It said price stability remained high on the government agenda.
The government gave itself a pat for partially insulating consumers from the adverse impact of rising global crude oil prices by keeping the prices of kerosene, cooking gas and diesel under control and only partially passing on the price increase.