Bangalore: Although global slowdown is affecting the country, the fundamentals of Indian economy are strong and the government is taking a series of steps to see it moves to a higher growth trajectory,
Cabinet Secretary Ajit Kumar Seth said.
The world economy is passing through a very difficult phase and the performance of the Indian economy has to be viewed in this context, Seth said at Global Summit, organised by the PHD Chamber of Commerce and Industry.
"There is no dearth of projections and statistics which we see bandied about, about what the growth rate (is). We say the GDP in the April to June quarter was 5.5 percent. Well, this is no doubt less than the 8 percent figure of the corresponding quarter of the last fiscal," Seth said.
"Look at the positive side, in the first quarter of the year, the
economy has recorded a higher growth rate than the previous quarter. We should remember that the world is passing through difficult times and whatever is happening outside will influence the domestic economy," he added.
The Union Cabinet Secretary said the Indian economy has seen similar difficult times in the not too distant past and managed to come out of it well.
"So, I do not see any reason at all why we should be pessimistic and I am not pessimistic at all. The macro-economic fundamentals are still intact. So it is not as if everything is going wrong. Not it is not," Seth said.
He also said the Finance Minister had on the August 6 made a statement in which he gave some indication about the way in which the government intends to react to the current situation and to see that the economy goes on to a high growth trajectory.
"I can just say at this stage that the government is considering a series of measures to implement the announcements made by the Finance Minister," he said.
Among the measures that Seth listed was the progress made by the Parthasathy Committee on issues like foreign investment and Kelkar report on fiscal consolidation.
"For instance, the committee under Parthasarthy Shome which had been set up to give recommendations on among other things GAAR and foreign investment, they have given a draft report," Seth said.
He added that comments had been invited from the financial world on the draft after which the report would be finalised.
"Last evening, Vijay Kelkar has submitted his report on the fiscal consolidation side. Now this is again an area on which the government is very keen to ensure, I think there is no choice considering the extent of the fiscal deficit and the current account deficit, there has to be consolidation," Seth said.
The Rangachary report will come later this month, he said.
"So, essentially the government is keen to remove the perceived difficulties of doing business in India. And we want to remove the fear of regulatory burden or regulatory over-reach," Seth said.
He added that measures were required to be taken and "appropriate signals" had already been given and said that in terms of giving clearances to fast track projects the Prime Minister Manmohan Singh himself was concerned about this and a system to track investment was is in place.
"On the revenue front there has been the news is good actually from the government point of view as the tax collection indicated an increase of 46% increase in tax collections."
The Cabinet Secretary said that Inflation continued to be challenge. "Inflation continues to be a big issue and this is something which we have to take care especially the supply side constraints and food inflation," he said.
Seth said that while a lot was happening there is a prevailing tendency to be critical of all that is happening.
