He said the government would, however, “wind down” the fiscal stimulus package next year.
“Like other countries, we resorted to a significant stimulus and we will take appropriate action next year to wind this down,” he said at the 25th India Economic Summit here.
Singh also promised a decisive change in the pace of reforms, mainly in the financial sector.
“In the coming months and years, I hope to see a decisive change in the pace of our progress to becoming a leading economy in the world,” he said while addressing global CEOs and captains of industry.
India better off
The Prime Minister said India has done relatively well to counter the ill-effects of the global economic crisis, but needs to do more to attract investments to ensure a high growth rate. “We are also better placed than any time in the recent past to push the reform process forward. We need to ensure that the financial system can provide the finance needed for our development. This opens up a broad agenda for reforms,” the Prime Minister said.
The prime minister said the accumulation of Foreign Direct Investment (FDI) inflow amounts to over US $120 billion since 2001-02. However, this is not a large enough number given the scale of our economy.
In pursuance of government’s commitment “to develop greater people-ownership of public undertakings,” the cabinet has recently decided the criteria on which such companies will qualify for disinvestment. “We now hope to see faster progress in sale of a portion of government shareholding in the domestic market and issue of fresh equities in respect of the selected companies in the public sector,” Singh said.
There are clearly signs of an upturn in the economy. With a normal monsoon next year, the country hoped to achieve a growth rate of over 7 per cent.
However, the latest statement from the prime minister contradicts the stand taken by his cabinet colleagues who were opposed to the withdrawal of the stimulus package.
Commerce and Industry Minister Anand Sharma had recently said: “Let’s not forget that the recovery in the global context is stimulus dependent. It is premature to think of withdrawing or going in for exit strategy.”
Last week, Finance Minister Pranab Mukherjee, too, had opposed the withdrawal of the package saying, “For the present ... the fiscal stimulus will have to continue, to allow its impact to fully through the economy.”
