Former finance minister P Chidambaram asked the government on Friday to kick-start stalled projects and “use persuasive powers” to convince the Reserve Bank of India to slash interest rates in order to boost investments.
He suggested a four-pronged strategy for reviving the economy. These include containing the fiscal deficit at 4.1% of GDP, appoint a head of the project management group, identify big-ticket investments, and convince the RBI governor that a rate cut is an imperative.
“Identify a few proposed big-ticket investments (foreign or Indian), bring every one into a room with the Prime Minister, and do not allow them to leave the room until they have resolved all the issues and announced the start date of each investment proposal,” Chidambaram said.
“All the signs of a sluggish economy were there — low credit growth, a limping manufacturing sector, no new major investments, stalled projects, infrastructure bottlenecks etc. Government should have focused on these matters. Alas, it did not. Nor did it use its Parliamentary majority and its claim of a ‘strong’ executive branch to push legislative and administrative measures,” he said in a statement.
“Government seems to have been seduced by the rise in the stock market and the adulation showered at organised Indian diaspora events.”