Amid threats that India's credit rating could be downgraded and a slowdown in the economy, Planning Commission Deputy Chairman Montek Singh Ahluwalia Monday said the government is taking several steps to boost investor confidence and more such measures may follow.
Hyderabad: Amid threats that India's credit rating could be downgraded and a slowdown in the economy, Planning Commission Deputy Chairman Montek Singh Ahluwalia Monday said the government is taking several steps to boost investor confidence and more such measures may follow.
"Lot of examples can be given on the steps the government has taken to get rid of impediments in movements of large projects. I think I am hoping that we will have more such steps. Lots of internal administrative decisions have been pushed forward," Ahluwalia told reporters at a seminar here.
On the GDP growth rate, he said the second half of the year will be better in terms of growth.
Ahluwalia said, however, the situation is still watchful despite the fact that deceleration has stopped.
"Deceleration has bottomed out. We are doing a number of things which I think will lead to revival of investor confidence. And the affect of these things always take a few months," he added.
Of late, credit rating agencies such as Standard & Poor's have warned of lowering India's credit rating in 24 months to 'junk' grade, if the country fails to carry out requisite economic and fiscal reforms.
Besides, they have lowered economic growth projections for the current fiscal and reduced the outlook to negative.
The Reserve Bank has also revised downwards the GDP growth estimate for the current fiscal to 5.8 percent from the earlier 6.5 percent, while increasing its March-end headline inflation forecast to 7.5 percent.
Meanwhile, the government has recently cleared proposals to allow the FDI in multi-brand retail and aviation sectors, besides agreeing to hike FDI limit in the insurance sector.
Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan has said recently that there is no case for lowering India's credit rating and the global agencies need to look at the international scenario before taking any rating action.
"The rating agencies also need to recognise the fact, we have taken some strong actions in the recent period ... Therefore, I believe the rating agencies do not have a strong basis for reducing the rating of India."
Meanwhile, replying to another query, Ahluwalia said the government is taking all necessary 'steps' to ensure fuel supply to power projects.
He however, did not share details of those 'steps' saying that they will be revealed at later stage.
"I think there some progress in making sure that the supply of fuel is available. Details of these things will be available bit later. But I know from internal discussions what needs to be done is being done," Ahluwalia said.
Speaking at the inaugural address at the seminar - Centre -State Relations in Indian Fiscal Context - organised by Centre for Economic and Social Studies, Ahluwalia said the Planning Commission is trying to allow the states to have more flexibility in implementing centrally sponsored schemes.
He said the ministries concerned and states' officials can sit together and modify guidelines according to the needs of the states; also, 10 percent of the centrally sponsored scheme amount can be used at the discretion of the State Government.
Ahluwalia said, "What we are trying to do (in the 12th plan) is for each centrally sponsored scheme, there will be guidelines. But the ministry concerned, will sit with the state government and modify the guidelines to reflect realities of the state government.
"(Besides,) for each state 10 percent of the fund should be completely flexible. In a sense, they can be used for innovative steps in the sector for which they are intended."
According to him, the proposal will go to Cabinet soon and once approved it will bring lot of changes in implementation of central schemes in the States.