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FM wants more reforms, end to coal, iron ore impasse

Facing all round attack over the bad state of the economy, Government today said unleashing of more reforms was the way to deal with the situation and pressed for ending the "impasse" in coal and iron ore sectors to push growth.
   
Finance Minister P Chidambaram listed ten steps including promoting of manufacturing sector and exports to boost faltering growth, which needs to be raised to its potential rate of 8 percent.

He was replying to a debate on the economic situation in the Lok Sabha during which Opposition said the government's "reckless policies" had led to despondency and uncertainty in the country and that the exit of UPA from power was the only way to remedy the situation.
   
Defending the government's actions to address economic woes, Chidambaram said, "What we need now is not less reforms but more reforms; not more restrictions but less restrictions; not a close economy but a more open economy."
   
Referring to the steps being taken to restrict fiscal deficit to 4.8 percent of the Gross Domestic Product (GDP), the Minister said he had drawn red line and that will not be crossed.    

"We will go through some pain, by the end of the day, I am sure we will be able to emerge stronger", he said, adding all efforts would be made to bring down the Current Account Deficit (CAD) to USD 70 billion from USD 88.2 billion during the 2012-13.
   
On specific question of India issuing sovereign bonds to raise overseas funds, Chidambaram said, "All options are on table...government will exercise its judgement at appropriate time. We must add to our reserves".

Referring to the 10 steps which included promoting exports, reviving investments, containing fiscal and current account deficits, raising capex of PSUs, recapitalising PSU banks, Chidambaram said, "If we are patient, firm and clear headed and once we take these steps, the economy will begin to turn and we will be able to build a strong economy."
   
Elaborating the steps, the Minister said the capital expenditure programme of PSUs is under evaluation. "We will monitor it very closely and see the capex programme is completed as envisaged".
   
In the budget Rs 14,000 crore recapitalisation for the PSU banks had been proposed, he said, adding "I hope we can invest more."
   
On problems being faced by power and other infrastructure sector, Chidambaram said, "We have to find a way to resolve the impasse in the coal sector, iron ore sector, environmental clearances, land acquisition which has come under judicial intervention. We have to resolve the impasse."
   
The impasse, Chidambaram said, "will affect any government in future. We will have to find a way in which we are respectful to Supreme Court, we must recognise the authority of Supreme Court, but also assert the authority of Parliament and executive government".
   
Because of the impasse, he said, India has to import coal despite having enough reserves for 200 years and also had to curtail import of iron ore. Similarly, he added, no manufacturing unit could come up unless the industry is able to acquire land.
   
Admitting that polity in the country is divided on economic policies, the Minister said there was a need to agree on some "common policies and common programmes" to boost growth.

Source: PTI