Search the Internet          Tips  Sites: Finance, Investment

PM convenes meetings to frame fiscal package

Aditi Phadnis

Concerned over the slowdown in different sectors of the economy, Prime Minister Atal Bihari Vajpayee has swung into action. The PM has convened a series of meetings in September to thrash out a revival blueprint.

While the first meeting on September 4 will be attended by all economic ministries, two more meetings-of the two advisory councils on trade and industry and the economy-will be held on September 7 and 10 respectively.

The closed-door meetings are also expected to be attended by the Reserve Bank of India governor Bimal Jalan are likely to result in formulation of a fiscal stimulus package.

Official sources said the package could include a substantial increase in public investment and measures to improve liquidity and remove bottlenecks in government expenditure.

Those attending the meetings have been asked to make detailed presentations on causes for the slow rate of growth in 2000-2001, overall slow growth in the Plan and fiscal, monetary and other problems, which are hurting the economy.

The Ministry of Finance, Commerce, and the Reserve Bank of India will prepare reports and slides, which will be discussed thoroughly at the meetings. The meetings will also discuss the problem of the low rate of realisation of FDI and the crisis in investment.

A PMO note to participants says that the polity is "concerned about the slowdown." It says that although different government agencies "including the RBI and the finance ministry have been engaged in making enactments, which are not sufficiently plain to stakeholders."

This is the first admission by the Prime Minister's Office that the economy is performing below par and that all economic ministries must get their act together to counter this. There is also an admission that more effort has to be put in to achieve political consensus on reforms.

Highly placed sources say that politically, the PM is conscious that constituents of the NDA (National Democratic Alliance) are doing their best to get the economy going again but that there is a feeling of drift.

These meetings will put an end to that and will infuse energy into the government.

Powered by

YOU MAY ALSO WANT TO READ:
The Rediff-Business Standard Special
The Budget 2001-2002 Special
Money
Business News

Tell us what you think of this report