The slowdown in India is a wake-up call for increasing the pace of actions and reforms, says Raghuram Rajan, the Chief Economic Adviser to the Ministry of Finance, in the Economic Survey for 2012-13. These are difficult times, but India has navigated such times before, and with good policies it will come through stronger as the slowdown is more or less over, the Survey states.
After being pilloried for inaction as the economy faltered in the past two years, the Congress-led government has launched a slew of economic initiatives since September last year that have helped lower the risk of a downgrade in its sovereign debt rating to junk bond status. It has opened retail and aviation sectors to more overseas investment, hiked rail passenger fares, cut fuel subsidies and delayed tax changes that threatened to deter capital inflows.
Making a strong case for reforms, the Survey says foreign direct investment in retail allowed by the government can pave the way for investment in new technology and marketing of agricultural produce in India. Fast agricultural growth remains vital for jobs, incomes and food security.
For improved agricultural growth, the Survey underlines the need for stable and consistent policies where markets play an appropriate role, private investment in infrastructure is stepped up, food price, food stock management and food distribution improves, and a predictable trade policy is adopted for agriculture.
With inputs from Reuters