PM on I-Day: Will do better on economy

Prime Minister Manmohan Singh may have called to consider livelihood security and energy security as matters of national security in his ninth Independence Day speech, but his words did little to break the impression of a policy paralysis within UPA-II.

Highlighting the need to step up economic growth and improve the investment climate, the Prime Minister in his address to the nation from the ramparts of the Red Fort on Wednesday said, "If we do not increase the pace of the country's economic growth, take steps to encourage new investment in the economy, improve the management of government finances and work for the livelihood security of the common man and energy security of the country, then it most certainly affects our national security."

But top economists failed to be convinced by the PM's words and said the government must take decisive policy action in order to prove its commitment to reviving growth and achieving fiscal consolidation.

"The PM gave an excellent speech but we need to follow the words with action, People are waiting and want credible policy action from the government to revive growth and reduce poverty without much delay. It is also hoped that it will work to reduce subsidy burden and fiscal consolidation," said M Govinda Rao, director, National Institute of Public Finance and Policy and a member of the Prime Minister's Economic Advisory Council.

High interest rates, spiraling prices, dipping investor interest and global slowdown along with deficient rains have impacted the domestic economy, giving rise to fears that GDP could grow by a mere 6 per cent in the current fiscal. While newly appointed finance minister P Chidambaram has unveiled an ambitious road map to revive growth and attract investors, the economy still faces the threat of a downgrade of its sovereign ratings by global agencies.

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