New Delhi: The government on Thursday said recent economic reforms like hike in diesel prices and liberalisation of FDI norms are expected to restore growth momentum.
"The economic reform measures recently outlined by the Government that include reduction in the subsidy on diesel, announcement of disinvestment in certain PSUs and steps to strengthen the investment climate ... Are expected to revive market confidence and restore growth momentum over the medium term," Minister of State for Finance Namo Narain Meena said in the Rajya Sabha in a written reply.
The steps to strengthen the investment climate include liberalisation of FDI in multi-brand retail, aviation, broadcasting, he said.
The other steps, Meena said being undertaken by the government to revive the economy include better access to finance for manufacturing sector, fast tracking of large investment projects, use of buffer stocks to moderate food inflation and strengthening of financial and banking sector.
In its second quarter review of monetary policy, the RBI had revised downwards country's GDP growth projection to 5.8 percent from 6.5 percent.
The RBI had observed that the reasons behind the revision include rise in global and domestic risks emanating from factors including slowing down of investment demand and moderation in consumption spending, he said.
In another reply, Meena said that the slowdown in the growth of the economy is mainly due to slowdown in the industrial production and lower growth registered in the agriculture sector.
"This reduction in the growth rate is attributable to both domestic and global factors," he said.
Among domestic factors, he said, the tightening of monetary policy by RBI to control inflation resulted in slowing down of investment and growth, particularly in the industrial sector.