FM pitches for more reforms

Calling for 8220;more of reforms8221; in order to sustain a growth rate of 8-10 per cent for the next two decades...

Calling for 8220;more of reforms8221; in order to sustain a growth rate of 8-10 per cent for the next two decades, finance minister P. Chidambaram today said that it was only this approach that would provide 8220;a durable solution8221; to the problems 8220;of poverty, unemployment, poor health and education8221; that the country faces.

Speaking at the annual economic economic editors conference today, the finance minister said that 8220;our neighbours in East Asia have done it in the 70s and 80s,8221; and 8220;now is our turn8221;. What is required therefore, according to the FM, is 8220;a resolute pressing ahead with reforms with a fine balancing of growth with equity8221;.

The FM8217;s statement comes at a time when the government is pressing for introducing crucial bills like pensions in the coming session of Parliament. Apart from providing a new avenue for savings, the pension bill is also important raising long-term funds for the infrastructure sector.

In fact, the FM while stressing on the importance of 8220;eliminating wasteful expenditure8221; also hinted at a 8220;further moderation8221; of tax rates as, in his opinion, there8217;s been 8220;an attitudinal change8221; towards payment of taxes on account of 8220;moderate and stable tax rates8221;.

In that regard while the FM admitted that there was a scope for further moderation, he did add that this 8220;will depend upon greater tax compliance8221;.

The FM also sent out a message to India Inc that 8220;the magnet for new investment should be better infrastructure and not tax concessions alone8221; as it was important to 8220;adopt a cautious attitude towards tax concessions and revenue sacrifices8221; keeping the FRBM constraints in mind.

In fact, the FM pointed out that keeping the objective of moving to a higher growth of 9 per cent in mind would mean 8220;finding the resources to finance such growth without compromising on financial stability and fiscal prudence8221;.

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The FM also voiced his concerns over the surging prices of commodities and said that it was essential to ensure adequate supply of essential commodities like wheat, sugar and pulses.

While overall inflation, that stood at 5.41 per cent for the week ended October 21, was mainly due to increase in prices of 30 essential commodities like wheat, atta, pulses, sugar, potatoes and milk whose prices grew at 8.7 per cent, he said that reduced domestic availability relative to demand coupled with firm international prices were constraining the efforts to moderate prices.

The FM however did point out that 8220;we should achieve procurement targets of wheat, paddy and rice set for the coming rabi season8221;.