Updated: March 29, 2016 2:53:44 am
Despite negative global cues, the India story is well on track as a result of prudence, sound policy and effective management on the part of the government, Prime Minister Narendra Modi said on Monday. Programmes undertaken by the NDA government, he asserted, are aimed at creating more employment as well as to carry out administrative and policy reforms for sustained growth.
“For India to be at the top of global growth tables is an unusual situation. Obviously, there are some who find that difficult to digest and come up with imaginative and fanciful ideas to belittle that achievement. The fact is that India’s economic success is the hard-won result of prudence, sound policy and effective management,” he said at the Bloomberg India Economic Forum.
“Between 2008 and 2009 crude oil prices fell steeply from a peak of $147 per barrel to less than $50. This was a steeper fall than between 2014 and 2015. Yet in 2009-10, India’s fiscal deficit, its current account deficit and its inflation rate, all got substantially worse. And this slide was from a higher base figure for all three. But in 2015-16, all three have improved, from a lower base,” Modi said.
“Many other emerging economies also depend on imported oil. If oil prices were the driver of success, those countries would all be showing similar results. But they are not. We have not been lucky with monsoons or weather. 2015 and 2014 have both been drought years. Yet food grain production has remained much higher, and inflation much lower, than in the last comparable drought year, which was 2009-10,” PM added.
Defending the Budget that has widely been described as pro-farmer, Modi quoted from a letter from M S Swaminathan to bolster that point as he spoke about policy direction and administrative reforms in detail.
Reeling out statistics, he said there has been a smart pickup in credit growth after September. While credit off-take in the year to February increased by 11.5 per cent, overall fund flow to the corporate sector via equity and borrowings rose over 30 per cent in the first three quarters of FY16. The trend of firms facing credit rating downgrade in 2013 and 2014 has been reversed and in the first half of FY16, for every firm getting a downgrade, there were more than two got upgrades, the best level in recent years, he said.
“Net foreign direct investment in the third quarter of FY16 was an all-time record,” he said highlighting increased overseas funds in fertiliser, sugar and agricultural machinery, sectors closely connected with rural economy. He added that FDI in construction saw 316 per cent growth, while the same in software and hardware almost quadrupled. Modi said his government’s focus was on agriculture and doubling farm income by 2022.
“We have initiated many steps. Many more lie ahead. Some have begun bearing fruit. What we have achieved so far, gives me the confidence that with the support of people, we can transform India. I know it will be difficult. But I am sure it is doable,” he said.
Asserting that experts are unanimous that India is one of the world economy’s brightest spots, he said the country has low inflation, a low balance of payments and current account deficit and a high rate of growth. “This is the result of good policy, not good fortune,” he said.
“We have not been lucky with global trade or growth. Both are low, and have not helped us in terms of export stimulus,” he said, adding India has also had two successive years of drought which was compounded by unseasonal hailstorms. Yet food grain production has remained much higher and inflation much lower, than in the last comparable drought year, which was 2009-10, he said.
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