“India’'s economic reforms have contributed to the Indian growth story... Overall GDP in 2010-11 has been estimated at 8.5 per cent.
The economy is expected to maintain the growth momentum at the same level in 2011-12," he told a gathering of corporate leaders and policymakers at the 'US-India Economic & Financial Partnership' conference here.
US businessmen are keenly looking at opening of the multi-brand retail sector to foreign investment and the issue was to come up during the bilateral meeting between Mukherjee and US Treasury Secretary Timothy Geithner.
As part of the major initiative, he said India has completely liberalised “pricing and payment of technology transfer fee, trademark, and brand name and royalty payments.” Although the economy is on a high growth path, Mukherjee said the challenge is to sustain GDP expansion in light of global developments and contain domestic inflation.
The policy makers, Mukherjee said, “have to be far more alert and prompt with their response and, at the same time, need to explore innovative approaches to sustain growth with stability.”
Refuting the observations that India was going slow on reforms, he said it is a continuous process and the UPA government was committed to the reform process.
“The more you reform, there is the need for additional reform,” he said. “We have recently finalised the guidelines of the debt bonds. We have also decided that...FDI should be more user-friendly. This has been done with the specific intent of enhancing clarity and predictability of our policy,” he added. Ownership and control, he said, “is now central to the FDI policy and the methodology in this regard has been clearly defined.”
Referring to the issue of inflation, Mukherjee said, “there are problems ...Inflationary pressure is putting a serious constraint (on the economy).” He said: “We can have a moderate rate of inflation and at the same time, reasonable developed growth. The monetary and fiscal policy must move in tandem. In India, we are doing so.”
Banking norms
As part of the financial sector reforms, Mukherjee said, the Reserve Bank of India would be coming out with guidelines for new banking licences that would allow private sector to set up lending institutions.
The mutual funds, he added, would be allowed to directly attract investments from foreign investors. Earlier, this window of investment was available only to FIIs and their sub-accounts. He also informed the investors about the steps being taken to reform the direct and indirect taxes regime. The government, he further said, intends to double the exports from India to $ 500 billion in the next three years.
