Free from the Left obstacles this time, the Government today unveiled its reforms plan in the financial sector and PSU disinvestment, coupled with measures to tackle the economic slowdown by focusing on sectors hit by global recession and boosting public investment.
While pursuing reforms, the pension and financial sectors and disinvestment in PSUs would be the priority areas for the UPA government.
"The current financial year is expected to see a slowing down of growth on account of the global recession ... Our immediate priority must be to focus on management of the economy that will counter the effect of the global slowdown by a combination of sectoral and macro-level policies," President Pratibha Patil said in her address to Parliament.
Her address, presenting the agenda of the new Government, said the focus would be on adversely-affected sectors like infrastructure, exports, small and medium enterprises, and housing to restore the growth momentum.
As promised by the Congress party, the government would enact a new law providing for 25 kg of rice and wheat per month at Rs 3 a kg to all families below the poverty line (BPL).
"This legislation will also be used to bring about broader systemic reforms in the Public Distribution System," she said.
On illegal money stashed abroad, the President said the government was fully seized of the issue. "It will vigorously pursue all necessary steps in coordination with the countries concerned," Patil added.
The BJP and the CPM had made black money parked abroad by Indians an election issue. The issue had also landed in the Supreme Court, where the government had said that it had taken expeditious measures to tackle it.
Patil said the government was committed to achieving high growth with low inflation, particularly in relation to prices of essential food items.
"My government is firmly maintaining high growth with low inflation, particularly in relation to prices of essential agricultural and industrial commodities," she said.
According to the top priority to bring the economy back on a high growth trajectory, the President said the measures would include expansion in public investment in infrastructure sectors, besides encouraging public-private partnerships.
"Financing the investment will be a critical constraint and my government is determined to ensure that innovative steps are taken in this area, consistent with medium term strategy of prudent fiscal management," she added.
After growing by an average of 9 per cent in the first four years of the previous UPA regime, growth slowed down to 6.7 per cent in 2008-09. In the current year also, the economy is expected to grow at a slower pace.
Noting that the country has benefited from large foreign investment flows, the President said foreign direct investment (FDI) needs to be encouraged through an appropriate policy regime.
"There is also a need to augment resources in the banking and insurance sectors in order to permit them to serve the needs of society better," she said.
The Government, she added, will recapitalise the public sector banks and also bring in legislation to establish a regulator for the pension sector. On disinvestment, she said every citizen has a right to own shares of public sector undertakings.
"My Government will develop a roadmap for listing and people-ownership of public sector undertakings while ensuring that the Government equity does not fall below 51 per cent," the President said.
With regard to tax reforms, the government would pursue implementation of Goods and Service Tax (GST) replacing excise duty and service tax at the Central level and VAT at the state level, she said.
