Swaminathan Aiyar: What is the main challenge in accelerating our economic growth?
Manmohan Singh: Right now, the challenge before the country is to accelerate the tempo of economic growth and at the same time to ensure that we do not slip on our obligations to moderate the price rise. I do believe the finance minister has tackled both these tasks and tackled well.
Manmohan Singh: The biggest single thing which will help control inflation is controlling the fiscal deficit. The fiscal deficit in the current year has turned out to be as high as 5.9%. The finance minister assured that he will bring it down to 5.1% of GDP. If that happens, that would be a material contribution to stabilising the price level and also reducing the extent of crowding out that invariably follows, if government borrowing goes haywire.
Swaminathan Aiyar: When are we going to hear the price increases for fuel or for fertiliser?
Manmohan Singh: The finance minister has pointed to the need to control subsidies. He has also said that he would bring the subsidies to less than 1.7% of GDP in the next three years. Now that obviously is a task which would require the government to put forward an effective programme for adjusting the prices of petroleum products and adjusting other relevant prices. So we have to bite the bullet. There is no other way in which you can reduce subsidies.
Swaminathan Aiyar: Mamata Banerjee seemed to be very worried about the possible rise in the price of these things. When there was a last attempt to increase the price of fuels, she protested and it got rolled back. Has she been consulted on this particular matter? Is she on board?
Manmohan Singh: These are compulsions of managing a coalition. There will be difficulties. There have been difficulties, but ultimately if the government is to govern, it must have a sustainable strategy for managing the economy. I sincerely hope when the time comes to take relevant and important decisions, which are tough, we will consult all our allies and take them on board.
Swaminathan Aiyar: Is it definitely fixed that Aadhaar is going to be the main platform on which the budget is going to distribute benefits to the people of India?
Manmohan Singh: The finance minister has made it quite clear that the report of the Aadhaar Committee bringing 40 crores additional numbers has been accepted. And, therefore, there may be controversies and there are controversies in this sort of thing all over the world, but we have begun well. We will use the modern technological devices to cut out wastage and leakages in the delivery mechanisms for various public sector services.
Swaminathan Aiyar: On fertiliser, there was the nutrient based subsidy for phosphates and potassium. It was not extended to urea. As a result, there was a huge excess demand in this last rabi season for urea instead of the other two. Is there any proposal that we will now have a nutrient based subsidy for all three, so that there is a better balanced use of fertiliser?
Manmohan Singh: There is a general agreement that we should have nutrient-based subsidies for all the three. But it was deliberately felt that at a time when international prices of urea were increasing, it would be wise to go slowly towards nutrient-based subsidies and decontrolling urea as well. So, it is a question of timing, but there are compulsions which require that the government will have to take sensible decisions even though they may not be very popular.
Swaminathan Aiyar: This is the third budget of UPA-2. In these three years, what would you say was the biggest achievement and what would you say was the biggest disappointment?
Manmohan Singh: The biggest achievement was that we were able to protect the growth rate of the economy much better than most other countries, even though our growth rate this year will be low compared with the past. Even then it is something which is very favourable when we look at what's happening in the rest of the world.
We are still in the league of frontrunners in the growth movement and we were able to protect the growth rate. In the year 2008-2009, the growth rate fell to 6.5%, but it reverted to 8.4% next year, and 8.4% the year after that. This year again it has slipped, but the challenge is to get it back to the path of 8 and 9% and that's the task that this government has set for itself.
Swaminathan Aiyar: So from this budget now, can we have a slogan on which the Congress can go for the next state election and then the general election?
Manmohan Singh: Budget is an important instrument of macroeconomic policy and faster, equitable, sustainable and more inclusive growth are the main aims of economic policies that our government under our leadership has put before the country. The challenge is to ensure that the economy moves on to a faster, sustainable and more inclusive growth path.
(Source- http://economictimes.indiatimes.com)
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