No policy paralysis in New Delhi: Pranab Mukherjee
On the sidelines of the annual World Bank and IMF meetings in Washington, the Finance Minister acknowledges that the government's success will depend on its ability to take coalition partners along.
As UPA government desperately fights the perception of a policy paralysis, Finance Minister Pranab Mukherjee dismisses it with equal vehemence contending that the coalition was set on achieving higher economic growth.
Unfazed by criticism from within and outside and some controversial comments of Chief Economic Advisor Kaushik Basu on a freeze on reforms, he is confident about his priorities on economy and fighting inflation.
Basu's comments created a storm back home in India with the opposition attacking the government and claiming that the Chief Economic Advisor had only spoken the truth.
"There is no question of policy paralysis in New Delhi. I do not agree with them," Mukherjee told agencies in an interview.
The Finance Minister was replying to apprehensions expressed by Corporate America over the perceived policy paralysis in the government and Basu's comments that there may not be any big ticket reforms till elections in 2014.
Rejecting criticism about lack of decisions, Mukherjee contended that the government has taken a number of policy decisions in recent months.
"We have a new manufacturing policy, very recently. It's in operation. We have announced earlier that we will institute infrastructure debt fund. We have created infrastructure debt fund," the minister, who is here to attend the annual Spring meeting of the IMF and the World Bank, said.
"We announced that we shall make easy access to commercial borrowing. Series of measures for easy access to commercial borrowing have been done. I do not agree with their perception with the so called policy paralysis. There is no policy paralysis," Mukherjee said.
The Finance Minister said the government has set its sight on achieving the goal of putting back the economy on higher growth path and control inflation.
"My first priority is to bring back the economy in higher growth path and to control inflation," Mukherjee said, adding that even an inflation of six to seven per cent is too high for him.
"Of course inflation has increased that is seasonal. Third is to consolidate the fiscal situation. Fiscal deficit is high. So fiscal consolidation is to be achieved, inflation has to be moderated, high growth rate to be achieved. These are to be the priorities of the Finance Minister," he said.
Time and again Mukherjee has been expressing his concern over the increasing inflation.
"On agricultural supply constraints, we have taken steps in budget we announced certain measures so that with higher production of those commodities which require, which are in short supply with the removal of that supply constraints it would be possible to reduce the inflationary pressure," he said.
"From the demand side, three consecutive years, we enhanced the interest rate. So excess liquidity has been mopped up from the market, and these are the situation that always ought to be kept under watch.
"If we can achieve fiscal consolidation that will also have an impact on the inflation, inflation would be reduced," Mukherjee said.
On the high volatility in global oil prices affecting a large number of countries like China, India and South Korea, Mukherjee said the international community should address this issue.
"International community should address this problem of fluctuation in global oil prices," he said.
"This high volatility of the oil prices it's affecting a large number of consumer countries, in particular, India, China, Korea which import substantial quantity of petrol and petroleum products," Mukherjee said.
High volatility in global oil prices has been one of the topics of discussion during his meetings with the world leaders on the sidelines of the annual Spring meeting of the World Bank and the IMF.
Mukherjee had earlier met South Korea Minister for Finance and Strategy Jaewan Bahk during which they discussed the issue of volatility of crude oil prices in international market and for creating global green climate fund.
He said continued volatility of international oil prices for a long period of time is a matter of concern.
The two leaders agreed to make a collective effort to address this challenging situation which is adversely affecting their economies.
Mukherjee, during his meeting with the South Korean Finance Minister, talked about how the uncertainty in oil prices disturbs all budgetary calculations in a country like India, where the entire burden in not passed on to the consumers. This fluctuation in the oil prices is having a devastating impact on budgetary calculations.
The South Korean Finance Minister also said that because the growth in oil demand is not much in the developed world but only in the developing world, there is a need to seriously look into the issue.