‘Without reforms, we risk a sharp slowdown’
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Making a strong case for the government's reform agenda, finance minister P Chidambaram on Monday said the measures were crucial to arrest the economic slowdown and called on political parties not to obstruct decision making.
"India's economy is challenged...Let me tell you the plan truth. Without reforms, we risk a sharp and continuing slowdown of the economy which we cannot afford," he said at the Economic Editors' Conference.
The government in recent months has taken a slew of reform measures to prop up economic growth that fell to a nine-year low of 6.5 per cent in 2011-12. Expressing confidence that with requisite savings and investments India's economic growth rate will recover to over 8 per cent and may even touch 9 per cent, Chidambaram said a pick up in the investment and savings rates during the second half of the fiscal would help better GDP growth in 2012-13 from the grew a mere 5.5 per cent in the first quarter.
A high investment rate of 38 per cent in 2007-08 helped the economy expand at 9.3 per cent and the government must strive to the same rate of investments. The government is now trying to address the 'difficult areas of reform' that were held back but are necessary to attract investments, he said.
The minister announced that the Insurance Laws (Amendment) Bill is likely to be tabled in Parliament in the Winter session and government would try to build consensus with the Bharatiya Janata Party. "I don't expect much opposition to the entire Bill except for the clause on FDI. I intend to meet with the principal Opposition party and seek consensus," he said.
Terming the recent controversy over permitting foreign direct investment in multi-brand retail as 'unnecessary and unjustified', the finance minister said, "We must not fear foreign investments in India. The decisions to allow foreign investment should not be tested on the basis of undefined ideology or theory, but on a clear-headed assessment of the advantages that would accrue to India," adding that FDI in retail, aviation and FM radio broadcasting will benefit the economy.
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