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No slowing down of reforms, govt ready with key legislations: FM

delhi Updated: Jul 27, 2011 19:48 IST

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Allaying apprehensions that reforms have hit a roadblock, finance minister Pranab Mukherjee on Wednesday said the government proposes to take up several economic legislations in the forthcoming session of Parliament.

"We have taken important measures like finalising Food Security Bill, Mines and Minerals Development and Regulation Bill. Already in the last session I have introduced bills including Insurance Bill, Banking Laws Amendment Bill and Constitutional Amendment Bill for GST," he told reporters.

The Monsoon Session of Parliament, which is expected to be stormy, will begin on August 1.

Mukherjee also exuded confidence that economy would shortly return to the pre-global crisis growth level of 9 %, though high inflation continue to be area of concern.

The Reserve Bank, he indicated, could also go in for another hike in key policy rates to check rising prices.

Asked if he was surprised by the sharp hike in key policy rates by RBI on Tuesday, the Minister said, "I cannot say it surprised me. It is substantial no doubt, but given the situation it was necessary.

"I don't think it is end of the tunnel (hike in interest rates). It is not like that. It does not happen (that way)," he said asserting that inflation at 9.4 % was reasonably high and "unacceptable".

Answering questions on trust deficit between the government and the industry, Mukherjee said, "I don't think there is any trust deficit. If there is a trust deficit, always through dialogue and discussion we can remove them and by taking appropriate measures."

Mukherjee further said that it was not correct to say that corporates are being subjected to scrutiny by everybody.

"Sometimes the scrutinies are routine...can you tell me any country in the world where the revenue department does not scrutinize the balance sheet (and) activities of the various sectors of the economy, particularly the corporate sector," he said while replying to questions relating to scrutiny of corporate by multiple government agencies.

The Finance Minister is expected to meet the captains of the industry on August 1. The meeting comes after the decision of the RBI to raise key interest rates by 50 basis points, a decision which evoked sharp reaction from the industry chambers.

The Reserve Bank's decision, according to industry chambers, would hurt investment and growth. The industrial growth is already showing signs of slowdown.

Referring to growth prospects, Mukherjee said, "I am quite confident that Indian economy would be in a position to come back (to pre-crisis level)."

India was growing at over 9 % before the global economic crisis pulled down the rate of economic expansion. The economic growth rate in the current fiscal, according to the Reserve Bank projections, may moderate to 8 per cent from 8.5 % during 2010-11.

Admitting that inflation at 9.4 % in June was "reasonably high and unacceptable", Mukherjee said it was a global phenomenon and the whole world was reeling under the impact of rising prices of fuel and other commodities.

The government and the central bank are taking steps to check price rise, he said, adding "I am optimistic that measures taken by the RBI by adjusting the crucial rate will have impact and inflation will come down".