Source: The Economy Times, Aug 19, 2013
NEW DELHI: Finance minister P Chidambaram has asked each of the secretaries in his ministry to present a 10-point action plan on Monday that could help draw up an agenda to kick-start a wider set of measures to revive the economy and improve business sentiment.
Chidambaram has asked all the four departments to come up with ideas that could be implemented or prioritised over the next few months. This will also send out a signal that the government was for the time done with steps to stabilise the rupee and wants to move on to other pressing issues.
“Each departments has to present a ten-point action plan on Monday” a ministry official familiar with the development told ET. Top bureaucrats in the finance ministry were closeted in a series of meetings on Saturday deliberating the things they will bring to the attention of the finance minister.
The action points could be anything that can help revive growth and boost sentiment, the official said pointing to a shift in the mood in the North Block that had been fire-fighting the rupee depreciation.
“There are lot of initiatives that are in the works in each dept. The idea is to move forward in a focused manner by prioritising things. This is largely aimed at bringing focused approach decision making,” another senior finance ministry official told ET.
Economic affairs secretary Arvind Mayaram said the government is already working on a plan to open up the ports sector and the real estate investment trusts (REITs) will be soon announced to help attract more equity.The action plan could also include impediments that the officials feel that need to be removed in order to revive growth, which is likely to be around 4.8% in the first quarter of the current fiscal, same as that in the last quarter of previous fiscal.
“We have done whatever we needed to do on the rupee front. It is now time to change focus,” the first official said.
Abheek Barua, chief economist with HDFC Bank agreed that measures on rupee should work and it was time to move on to other things. “I don’t think any more measures would be required. They need to be communicated well. The government has already given out specific fund raising plan including quasi issuances and this should show its effect once money comes in. Some measures on hasten investments could be taken. Clearance to Mylan is a big showcase decision,” he said.
Finance minister had last week said the government will contain the current account deficit at $70 billion, 3.7% of GDP against 4.8% last year, and outlined a plan to fund this deficit without drawing on the country’s forex reserves.
Earlier, the government had further increased the duty on gold and silver while the Reserve Bank of India had lowered the limit on outbound investment through the automatic route for corporate and also reduced the amount individuals could send out under the liberalised remittances schemes to 75,000 dollars from 200,000 dollars. Despite the measures, the rupee breached 62/dollar on Friday and sensex crashed 769 points.