Constraints to faster growth

NEW DELHI: The Finance Minister, Mr. P. Chidambaram pointed out three major constraints in the way of achieving faster growth as lack of investment in infrastructure and agriculture, inability to implement projects on time and investment of knowledge in India’s manufacturing and services sector, a FICCI press release reports. 

Addressing a special session on the occasion of the 79th Annual General Meeting of FICCI, the Finance Minister said: ‘There is tremendous shortage of investment in infrastructure and agriculture, with infrastructure alone requiring US$ 320 billion. We have to devise ways to channelise the money available worldwide into India for which the appropriate regulations would be devised.”

He said a mechanism would be put in place “in the next few weeks” to facilitate and complete both public and private sector projects on time.

The Finance Minister urged FICCI to set up a ‘knowledge cell’,  manned by outstanding resource persons, where ideas and knowledge could germinate. These could then be fleshed out and used to create industrial and other products to effectively compete in world markets. The government, on its part, would be willing to contribute to the setting up of such a cell, he said.

Mr. Chidambaram, however, expressed two basic concerns. One, lack of growth in some sectors of the manufacturing industry such as food products, paper & paper products, leather, chemicals, basic metals and machinery; and two, the increase in inflation mainly on account of rise in manufactured product prices. “I appeal to you to address the question of inflation seriously, else it would work to your disadvantage by pushing up interest costs and other input prices”, he told captains of industry.

He said the economy, industry and the services sectors had performed well during the past year and in the first two quarters of the current fiscal and expressed optimism that the second half of the  year would close with a growth rate of close to 9%.

Industry, he said, had come of age and mastered technology, products and finances and   “it is now important for you to track the world markets and learn to adjust to changing market situations.”

Source: CIOL Bureau