NEW DELHI, NOV 4: After straining everyone’s credulity by insisting that the economy was in fine fettle despite the slowdown in growth, Finance Minister Yashwant Sinha’s has finally descended to reality.Last month, at the Economic Editors’ Conference in the capital, Sinha insisted that the economy would grow at 7 per cent this year, despite the CSO releasing data highlighting the slowdown. Today, however, at a seminar on ‘Civil Services and the Constitution’, Sinha, he said that growth rate would drop by 1 per cent, to around 5.8 per cent as compared to the projected 7.He was, however, quick to add that the government would adopt a four-point strategy to reverse the trend. He then went on to spell out the strategy which, in the given circumstances, appeared more of a long-term than an immediate-term one.So, at a time when he himself is saying growth will fall, it’s obvious that tax revenues will be short of target. Add to this, the lack of progress on privatisation, and the increase in expenses, keeping the fiscal deficit in check will be a stupendous task. Yet, Sinha said today that the government’s strategy would be to contain fiscal deficit. Apart from this, his strategy to up growth was to increase exports, push up reforms and ensure a transparent public administration.With economic growth not likely to rebound in a hurry, Sinha sought to point out virtues in the lower growth as well. According to him, ‘the positive aspect is that even on a 6 per cent to 5.8 per cent growth rate concerns are being expressed. This is a good sign that expectations have gone up in recent years as compared to the time when the country was achieving a Hindu rate of growth.’He said the government was also committed to see that the increased growth was accompanied by the other social objectives of eliminating poverty and generating more employment.The finance minister laid more emphasise on exports to boost growth in the economy saying India has to explore new markets for its products in the international arena.Expressing seriousness about carrying out the reforms process, he said that the government would introduce the Fiscal Responsibility Bill in the winter session of Parliament. The bill aims to incorporate self corrective mechanisms to keep the fiscal deficit at the budgetary target.‘We also have to ensure transparent public administration’, he said, adding ‘people are not going to be satisfied with slogans and assurances. We have to deliver the goods as fast as possible.’The finance minister also added that a constitution review Commission would be setup to suggest major changes in legislations in order to improve the functioning of the government.
