Prime Minister Manmohan Singh on Tuesday promised that his government would take a flurry of reformist actions — transparent and stable — to counter the economic slide and calm the nerves of investors.
Singh said at the G-20 summit at this resort town on Tuesday: “Our policies will be … designed to provide a level playing field to both domestic and foreign investors.”The recent policy pronouncements, such as the budget provision to empower taxmen to scrutinise corporate deals that were already struck, sparked fears among investors. The PM also pledged $10 billion (about Rs 56,000 crore) to the IMF to help Eurozone nations come out of the current economic crisis.
Meanwhile, Indian stock markets cheered Singh’s pro-reforms remarks — especially a day after US credit rating agency Fitch Ratings downgraded India from stable to negative.
The 30-share BSE Sensex jumped by 154 points, or 0.92%, on Tuesday, following Monday’s 244-point tumble caused by the RBI decision to keep interest rates unchanged.
Singh blamed both “internal constraints” and external factors for the slide in GDP growth rate that slumped to a 9-year low of 5.3% in January-March 2012.
Assuring the international community that the fundamentals of the economy were sound, Singh said India would be back to 8-9 % growth levels by restoring investor confidence, cutting subsidies and fast-tracking infrastructure projects.