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“Only option for India is to march ahead,” says Dr. Ashwani Kumar

Speaking at the 7th India Investor Conference, Dr. Ashwani Kumar, Minister of State for Planning, Science & Technology and Earth Sciences said, “We want to bring down our trade deficit from the current 5.9% to 5.1%.”

May 30, 2012 5:32 IST | India Infoline News Service
“Despite global economic crisis, I believe India’s growth story is real. India insulated from the 1997 crisis. It also mitigated the 2008 slowdown. The only option for India now is to move forward,” said Dr. Ashwani Kumar, Minister of State for Planning, Science & Technology and Earth Sciences.

Dr. Kumar was speaking at the ‘7th India Investor Conference’ by Citigroup, India, in Mumbai today. Elaborating his views on ‘India—Vision for the Future’, he said, “India’s GDP (gross domestic product) is expected to grow at 8% on an average five years from now. In 2011, the GDP was at 6.9%. It is up to us to take action, realise the potential and keep India growing. We are one of the economies which is driven by multiple drivers of growth. Among these include empowered agriculture community, higher consumer demand, rising middle class, robust regulatory mechanism and advance technology.”

Dr. Kumar said, “Today, we have eight months of foreign exchange reserves against two weeks of forex reserves in 1991.” India’s growth depends on the growth of services, industry and agriculture sector. The country is irrevocably a part of the global economy and stands to gain from it and at the same time is also adversely impacted by the global slowdown. Over 65% of India’s GDP comes from the services sector. However, growth in services is far less variable than the manufacturing and agriculture sectors.

In all democratic countries, the government is accountable to its people. The aim of the government is to ensure better quality of life for its people. In a democratic country, the “will” of the people is “sovereign” and has to be respected. “To have our bills passed and policies implemented, we need to achieve a broad political support,” he added.

India needs to keep its democratic ethos stronger. We are faced with issues of food concern, energy security, water availability, internal violence, illiteracy and rising prices of fuel among others. Many people in India still live on margin and rising prices would hurt poor people. The government must intervene to protect these people against rising prices. Dr. Kumar emphasised that gains of economic prosperity must be distributed in such as way that every person of the country gets benefited by the gains. For this, the country needs to remove trust deficit at all levels.

Under the Bharat Nirman programme—a business plan for rural infrastructure—1 lakh villages got electricity, 2 lakh kilometers of rural roads were restored and 1 crore hectare of irrigation facility was provided. The proper irrigation facility would improve productivity and benefit Indian economy at large. Over 15-million tonne food capacity storage was created in India.

Among the challenges—which India is facing—are fiscal deficit, trade deficit and current account deficit. Dr. Kumar said, “We want to bring down our trade deficit from the current 5.9% to 5.1%. We need $1.2 trillion for urban renewal as 40% of India’s population will stay in urban cities by 2020. The government can’t fund all these investments so public private partnership (PPP) will be encouraged.”

Speaking about the rising inflation rate, Dr. Kumar said the Reserve Bank of India (RBI) and finance ministry has announced a series of measures to control inflation. It is not easy to answer by when the inflation rate will be brought down. But, high interest rate is expected to moderate inflation. Also good monsoon and normal harvest are likely to moderate inflation.

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