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April 27, 2001
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Money > Business Headlines > Report April 27, 2001 |
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FM advisor upbeat on economic prospectsP Vaidyanathan Iyer & Subhomoy Bhattacharjee The growth prospects of the economy remain on course despite the current hiccups in the capital markets and the slowdown in the rate of industrial growth, according to Rakesh Mohan, advisor to the finance minister. Rakesh Mohan said, "there has been no change in expectations in the economy." He agreed that industrial growth is not going well but claimed that in spite of all problems, the economy has averaged a plus 6 per cent growth in the past three years, and said this year should continue the trend. The advisor to FM was particularly optimistic about the reforms in the power sector. Pointing to the reforms in the sector that have been flagged off after the budget, Rakesh Mohan said he was confident that private sector investment in power sector will be forthcoming in another six months, if "the government can demonstrate that the reforms in the sector will proceed". He said the government is hopeful that private players will move in soon since power projects takes a long gestation period. "We do expect the private promoters to show interest soon as the SEBs can be expected to turn around in another three years," he added. On the theme of industrial growth, Rakesh Mohan said, "there is no switch to turn on the light for the economy, but one month or a few weeks do not dampen an economy". According to him the budgetary provisions will not be back pedalled in response to the current scam. Instead, he felt the measures announced in the budget to encourage investment in food processing and infrastructure sector should create an injection of demand in several sectors to boost the growth potential of the economy. He said the government's game plan is based on the fact that there has been a fall in the poverty ratio to 27 per cent, allied to a sustained export growth rate of 20 per cent, both of which should help the economy to move to a higher growth path. The advisor to the Finance Minister said the government was also confident of raising Rs 120 billion from divestment in this fiscal, in spite of the initial problems regarding Balco privatisation. Powered by YOU MAY ALSO WANT TO READ:
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