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‘9% growth not possible immediately’

In his first interview after taking charge as finance minister, Pranab Mukherjee spoke to Gautam Chikermane, Rajesh Mahapatra and Vinod Sharma on issues before the government today.
Hindustan Times | By HT Correspondent
UPDATED ON JUN 03, 2009 05:33 PM IST

In his first interview after taking charge as finance minister, Pranab Mukherjee spoke to Gautam Chikermane, Rajesh Mahapatra and Vinod Sharma on issues before the government. Close to midnight, Mukherjee, 73, was alert, incisive and courteous. Excerpts:

This is one of the most difficult times the world has ever seen. When do you see a revival for the Indian economy?

It would be difficult to predict an exact time frame. Certain signs of recovery are there. For instance FII inflows have started. The stimulus packages that we passed in December and January have also started yielding results in certain sectors like steel and cement. But much more is needed for faster growth. It will not be possible for us to spell out those measures as we are in the process of formulating the budget. As and when the budget is presented, the scenario will be clear.
I am optimistic, but at the same time I do not feel that we will be able to come back to 8.6-9.0 per cent growth in the immediate future. It will take some time.

On the growth front, what is the modest and reasonable expectation that one should have?

In the next couple of days, the CSO figures for 2008-09 (GDP) will be available. I think we have registered around 6.5 per cent growth in that year. Growth in 2009-10 will depend on when and how the recovery starts, but I will not say it will be too bad.

Agriculture and rural development were the thrust areas for the UPA government. Is this thrust going to continue?

If you glance through the interim budget, you will find that all these areas have been spoken about.

What are you doing to boost investment in infrastructure?

Infrastructure expenditure that we have given through the stimulus packages, its spending has started in some areas. But in certain areas it is yet to pick up. For instance, as part of support to the automobile industry, 1,400 buses were to be purchased by state governments. But the code of conduct became operational and so it was not possible to actually realise that. Now, it should happen.

What about private investments that have flagged in recent months?

For that we have made credit accessible. Eased the liquidity position through monetary policy.

Farmers on the ground complain that benefits don’t reach them…

There are certain mismatches in the delivery system, which need to be addressed. In infrastructure, construction of houses, private sector can play an important role.

The other issue that is affecting people directly is the loss of jobs in unorganised sectors, and sectors like handicrafts and textiles. Half a million jobs have vanished. What do you plan to do on that front?

Job losses are a matter of serious concern for us. We shall have to create jobs and for that we have to make investments. And for that we need money. I do hope to be able to make more resources available for employment creation.

Now that you no longer depend on the support of the Left parties, will you push for liberalisation measures like disinvestment and easing of foreign investment caps?

I will address them at the time of the budget. I cannot comment now.

Should we be looking at a budget in the first week of July?

More or less around that time.

Given the popularity and success of the NREGS (National Rural Employment Guarantee Scheme), is there a case for replicating it in urban areas?

We have already stated it in the manifesto and have already started it in the urban areas. What impressed the electorate was not so much the policy, it is the implementation of this policy. Grassroots people are only interested in seeing it implemented. These policies have been going on since the 1980s but did not have that much of an impact that NREGA has done.

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