Sub-seven slowdown

Govt should stop blaming the world,start fixing problems at home

Govt should stop blaming the world,start fixing problems at home

The sub-7 per cent GDP growth rate for 2011-12 does not come as a surprise to India watchers abroad and pragmatic analysts at home. A freeze in government decision-making and the central banks tight monetary stance killed corporate Indias appetite for investment. But until as late as last week,the government could not imagine the GDP growth rate to slip so low,its lowest in three years. In fact,addressing a conference of state chief secretaries less than a week ago,Prime Minister Manmohan Singh said growth in the current financial year will be between 7 and 7.5 per cent. He blamed the lower growth rate largely to the continuing uncertainty in the global economic environment. Three months ago at the G-20 summit in Cannes,he said India would grow between 7.6 per cent and 8 per cent.

True,the global economy is in doldrums. But in such times,it is incumbent upon government to be more proactive in inducing domestic investment. But from disinvestment to the land acquisition law,key issues are gathering dust for more than a year. To top it,partisan politics and pressures of coalition parties have stalled big-ticket policy moves. Instead of acknowledging this and strategising the way forward,the prime minister expressed disappointment at negative comments by corporate leaders. And his finance minister,Pranab Mukherjee,went a step further to say industry must not keep whining.

Even today,Mukherjee said he anticipates the GDP growth numbers to see an upward revision when the full data for 2011-12 is available. Going by the past trend,it is most likely the numbers will be revised up. Certainly,it will not be anywhere close to his 9 per cent +/- 0.25 per cent estimate made last February. The finance minister is better served looking up the components that have fared miserably. Mining and quarrying has decelerated 2.2 per cent compared with 5 per cent growth in 2010-11. Former environment minister Jairam Rameshs go,no-go definition of coal blocks has done irreparable damage to growth. The Prime Ministers Office is focusing on undoing this damage. There are signs of increased activity at the PMO. The only antidote to a slowdown when there is little inspiration from the rest of the world is quicker decisions and fast-tracking of reforms.