Government's priority is to reverse economic slowdown: PM

Last Updated: Thu, Dec 27, 2012 06:20 hrs

Asserting that the government's priority is to reverse the economic slowdown, Prime Minister Dr. Manmohan Singh on Thursday said that achieving an average of eight percent growth in the 12th plan, following less than six percent in the first year, is still an ambitious target.

Addressing the National Development Council (NDC) meeting here, Dr. Singh said: The Deputy Chairman has indicated that in view of the latest assessment of the state of the global recovery, the overall growth target for the Twelfth Plan is being set at eight percent. This is a reasonable modification but I must emphasise that achieving an average of eight percent growth, following less than six percent in the first year, is still an ambitious target."

"As the Plan document makes clear, the high growth scenario will definitely not materialise if we follow a "business as usual" policy. The Plan identifies a number of areas where new initiatives and policy innovations are needed. Many of these are areas where the principal responsibility is that of the States. I look forward to hearing the views of Chief Ministers on these suggestions," he added.

Asserting that while we need to accelerate growth, we do not view growth as an end in itself, Dr. Singh said: " Our real objective must be to improve the condition of lives of the 'aam aadmi', which is why we emphasise that growth must be inclusive."

"There are two reasons why rapid growth is necessary to achieve inclusiveness. First, it is necessary to generate the revenues to finance our many programmes of inclusiveness. If growth slows down, neither the States nor the Centre will have the resources needed to implement inclusiveness programmes. We will either be forced to cut these programmes, or be pushed into tolerating a higher fiscal deficit, which will have other negative consequences," he said.

"Rapid growth also contributes directly to inclusiveness because it provides greater access to income and employment opportunities. Policies aimed at stimulating growth in agriculture and in medium and small industries, combined with steps to promote education and skill development, will produce a growth process, which is inherently more inclusive. The Twelfth Plan strategy contains many elements, which will ensure that growth is as inclusive as possible. I welcome your comments on this strategy," he added.

Stressing on the early implementation of Goods and Services Tax (GST), Dr. Singh said: "I have mentioned that both the Centre and the States face resource constraints. Both therefore have to make determined efforts to mobilise resources to fund the Plan."

" The Plan document points out that we need to increase the tax ratio as a percent of GDP through a combination of tax reforms and better tax administration. Early implementation of the GST is critical in this context. I hope we will have the co-operation of the States to introduce the GST as quickly as possible," he added. (ANI)

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