India economy in hard times, but can be overcome: Prime Minister

April 15, 2012 - 14:49
Prime Minister Manmohan Singh admitted the economy was facing difficult times but expressed hope these would be overcome, even as his key economic adviser spelt out a policy prescription for double digit growth that includes deregulation of fuel prices and ‘certainty’ in tax policies.
 
“There are difficulties. Life will not be worth living if there are no difficulties. I am confident with great determination, we will overcome (these),” the Prime Minister said at the launch of the updated book ‘India’s Economic Reforms and Development: Essays for Manmohan Singh’ edited by Isher Judge Ahluwalia, a noted economist and Chairperson of policy think-tank ICRIER, and IMD Little.
 
While the Indian economy registered a growth of 6.9 per cent in 2011-12, the fiscal deficit shot up to a massive 5.9 per cent of the GDP while headline inflation averaged at close to 7 per cent. High prices and an aggressive interest rate regime that is eating into investment plans, GDP growth is expected to pick up to a modest 7.6 per cent in 2012-13, while the deficit is estimated to be contained at 5.1 per cent of the GDP.
 
The PM’s honorary economic adviser Raghuram G Rajan called for implementing the second generation of economic reforms including raising of fuel prices quickly, resolving bottlenecks and treating foreign investors ‘kindly’.
 
Rajan, who is also Professor at the University of Chicago said that Budget provisions on retrospective tax amendments and General Anti Avoidance Rules (GAAR) must be reviewed.
 
“We should avoid retrospective tax amendments and if necessary renegotiate double tax avoidance agreements with Mauritius and Singapore,” Rajan said, while calling for a need to relook at the GAAR terming it a ‘catch all provision.’
(Source: indianexpress)