Our PM Dr. Singh addressed select few editors and here is our analysis from the text that was made available to us after discussing with our Political and Editorial Analysts.
Inflation: Effect of liquidity injection by the US was unexpected, Middle East situation could worsen; no control over international commodity prices, but support the hike in procurement prices to farmers. The problem is global, cf. China. Rangarajan [PMEAC Chairman] says inflation should be under 6.5% by March. UIDAI: Promises to eliminate the scope of corruption and leakages in subsidy management, but it would take time.
Economic Growth: Committed to growth of 9 to 10% p.a. Savings at 34-35% of GDP, investment rate of 36-37% and ICOR of 4:1 implies 9% growth is manageable. Committed to modernizing infrastructure, education and health sectors, and expansion of insurance to the entire population.
International scenario: remains uncertain and non-positive, global recovery is fragile, concerns in the Middle East are important for 6m Indians there are 70% of oil. India’s large common market would create growth opportunities with enablers like the GST, and interstate commerce in place.
Continuing Reforms: Management and reform of infrastructure is a priority to sustain the growth momentum. The public procurement system must be made more transparent, esp. for scarce natural resources, like land, where legislation would require modification. Also need focus on rural health, education, and skill formation.Would require the BJP’s support on the bill to raise FDI in insurance to 49%.FDI in retail becomes important in the context of efficient supply chains and distribution of food supply.
Cabinet reshuffle is a certainty.Committed to maintain defence expenditure at 3% of GDP.MOEF has had to reverse many decisions on pressure from the PMO—a ‘balance’ is needed on this matter.
Corruption: remains an important issue. Understands the need to voice opinions by every section of the society, but there’s need for bipartisanship in this matters.
Lokpal: is an essential and desirable regulation. Has no hesitation in bringing himself under the purview of the bill, but there are strong voices on either side of the argument in the Govt., Centre and States, and hopes there’d be a way out. The PM of India is anyway covered under the anti-corruption Act and can be dismissed with a no-confidence vote of the Parliament. Further, the system may not stand the strain if the bill is expanded to the extent desired at the moment in the Jan Lokpal bill. Bringing in senior members of the judiciary would raise its own constitutional problems, but overall remain confident of a national consensus.
Tax Evasion: is a major source of black money in the economy, and the Govt. is in the process of renegotiating a number of DTAAs with various countries.