Stating that sluggish pace of structural reforms would result in an economic slump, the government on Monday flagged concerns about the “obstructionism” to policies aimed at facilitating growth while questioning the controversy over FDI in retail, a measure first mooted by NDA government.
Addressing the annual Economic Editors’ Conference here, Finance Minister P Chidambaram said controversies should not block reforms in coal, mining, power, oil and gas and infrastructure sector which generate employment for the youth. “What is the controversy over FDI in (multi-brand) retail?
The first comprehensive Cabinet paper on FDI in retail was prepared by the NDA government in 2002 which acknowledged that the FDI was essential to improve the supply chain in agriculture. It also said FDI in retail would generate millions of jobs. So, why there should be any controversy when the (UPA) government lays down guidelines to enable the same?,” he asked.
To quell the fear that foreign investments will impact Indian businesses and small-time businessmen, he said India has the sovereign right to decide where and how to allow foreign investments into the country.
Chidambaram said slowing the inflow of investments would have an adverse effect on the country’s economic growth and hinted at lowering of current interest rates in Reserve Bank of India.
“A tight monetary policy has dampened investment as well as growth, particularly in the industrial sector… It is the government’s firm belief that fiscal policy and monetary policy should work in tandem to contain inflation and stimulate growth,” he said.