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New Govt promises 7-8 per cent economic growth
Apart from aiming for a 7-8% economic growth, the Govt will also boost foreign investment, but slow down privatisation of state firms.
The Congress-led coalition, which will be sworn-in later on Saturday, will aim for seven-eight per cent annual economic growth and encourage foreign investment, but slow down privatisation of state firms.
A draft of a Common Minimum Programme (CMP), the bedrock of Government policy thrashed out in negotiations between the Congress party and its regional and left-wing allies in the coalition, has been more or less agreed, party leaders said.
Some fine-tuning may be needed, especially on the sell-off of state-run firms and providing employment in rural areas, they said.
"It sets a seven-eight per cent annual growth for the economy. There will be increased investment to the agriculture sector," said senior CPI leader D Raja.
Details of the policy, which contained few surprises, came just hours before Manmohan Singh, former Finance Minister who kicked off the country's economic reforms 13 years ago, was set to be sworn-in as Prime Minister.
Sources in the coalition -- to be named the United Progressive Alliance -- said the CMP outlined the new Government's commitment to orderly development of stock markets and encouragement for foreign portfolio and direct investment.
Fiscal consolidation will continue, with the Government aiming to match revenues with expenditure within five years.
India's fiscal deficit is among the largest in the world with the combined deficit of state and Union Governments at over 10 per cent of the GDP.
Analysts say the country's burgeoning deficit is the biggest hurdle to growth.
The draft says the Government will privatise state-run firms on a selective basis with efforts to sell or close down loss-making units and firms will be encouraged to offload equity in the stock market.
State-run banks will also be encouraged to tap the stock markets to raise funds.
Oil and Natural Gas Corp, Gas Authority of India Ltd, power firm National Thermal Power Corp, Steel Authority of India Ltd, Bharat Heavy Electricals Ltd are out of the privatisation list.
The CMP said the new Government will focus on reforms in the agriculture and rural sector to benefit the nearly seventy per cent of nation's one billion people who live off agriculture.
The emphasis will be on improving irrigation facilities, which will reduce India's dependence on the annual monsoon and allow multi-cropping.
The programme says subsidies should continue, but need to be targeted to the needy and the poor.
On foreign policy, the CMP puts relations with the United States at a high priority, like the previous Government, as well with neighbours, including Pakistan.
