New Delhi : Prime Minister Narendra Modi on Friday vowed to move ahead with economic reforms, while Finance Minister Arun Jaitley said there was no major worry on meeting fiscal deficit targets.
Addressing the 13th edition of the Hindustan Times Leadership Summit here, Modi signalled his government’s intentions, saying reforms were not limited to investment and disinvestment.
He said his focus was on translating good intentions into action.
He outlined his government’s approach to achieving economic objectives through efficiency and targeting subsidies — and not necessarily through big-bang announcements that grab newspaper headlines.
He cited instances to show how the government had sought to bring about changes since he led the BJP-led NDA to power 18 months ago.
The prime minister referred to expectations among industrialists for big-bang reforms but said changes were being brought without causing social tensions or creating banner headlines.
“The country will move ahead for sure. You have faith,” he said on the first day of the two-day summit.
Referring to the push for use of LED bulbs in 100 cities, Modi said it would save 21,500 MW of power. Generating this much power would require an investment of about Rs.1.25 lakh crore.
He said if he had made an announcement of such an investment, it would have made major news. “This (LEDs) will also lead to saving of Rs.45,000 crore every year.”
He said the subsidy on cooking gas cylinders had been linked to direct benefit transfer and led to saving crores of rupees. But he did not see it as a reform. “We have to change our thinking.”
Noting “reformists” will say the government should go for disinvestment of public sector units, he said there was a third option – to bring about efficiency and make the process of running the sector apolitical.
Modi said India was moving at a fast pace among bigger economies.
“The condition of the world is of slowdown. GDP in euro region has got stuck at 1.5 percent. A lot of things about China have come to light in the past few days.”
The prime minister said progress had to be seen in the global context. “If we overlook the past two or five years and evaluate, it will not lead to the right conclusion.”
Modi got a standing ovation at the end of his about 40-minute speech, the gathering including top industrialists.
In his address, Finance Minister Jaitley said the government was not concerned about keeping to fiscal deficit targets on account of the One Rank One Pension (OROP) scheme and the latest Pay Commission suggestions as the economy was showing signs of returning to growth path.
“Normally, when Pay Commission recommendations are implemented, salaries and pensions put pressure on the budgetary limit of 2.5 percent under these heads that financial planners follow.
“This pressure on the fiscal deficit will move up in the initial 2-3 years of the salaries, pension payments. But the economy is also growing, with it the base of the GDP… So the government’s capacity to absorb expenditure is also increasing,” he said.