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President on the economic crisis & black money

June 4, 2009 13:52 IST

President on the economic crisis & black money

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'Indian economy to slow down'

Expecting the economy to slow down in the current fiscal amid the global recession, President Pratibha Patil on Thursday said the new government will focus on adversely-affected sectors like infrastructure, exports, small and medium enterprises (SMEs), and housing to restore the growth momentum.

The UPA government will "vigorously" pursue steps against illegal money of Indians in secret bank accounts abroad, President Pratibha Patil said.

Presenting the agenda of the second UPA government at the joint session of Parliament, Patil said the new regime will develop a roadmap for listing public sector units, co-ordinate with other countries to bring back illegal money stashed in secret bank accounts, recapitalise public sector banks, and bring in the pension reforms bill.

Text: PTI


Image: Indian President Pratibha Patil
Photographs: B Mathur/Reuters
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Focus on crisis-hit sectors

"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," she added.

The new government, the President said, will focus on sectors like small and medium enterprises (SMEs), exports, textiles, commercial vehicles, infrastructure and housing as they are adversely hit by the global financial meltdown.


Image: An employee works inside Maruti Suzuki's newly launched petrol engine plant on the outskirts of New Delhi.
Photographs: Vijay Mathur/Reuters
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Rice, wheat at Rs 3 a kg

The UPA government will enact the National Food Security Act to provide 25 kg of rice or wheat at Rs 3 a kg per month to families below the poverty line, a promise made in the Congress election manifesto, the President said.

Patil said the government would focus on managing the economy to counter the effect of the global slowdown through a combination of sectoral and macro-level policies.

The efforts, she added, should be accompanied by an expansion of public investment in infrastructure sectors, besides encouraging public-private partnerships.


Image: An Indian farmer rests on the heap of paddy while awaiting for prospective buyers.
Photographs: Reuters
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FDI to get boost

Noting that the country has benefited from large foreign investment flows, the President said foreign direct investment needs to be encouraged through appropriate policy.

"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 the 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.


Image: A customer uses his card to withdraw money from an ATM.
Photographs: Amit Gupta/Reuters
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Making India slum-free in the next five years

On the social sectors, she said the government will expand the scope of the National Rural Employment Guarantee scheme, make India slum-free in the next five years and set up higher targets in the second phase of the Bharat Nirman programme.

As regards Goods and Service Tax, which will replace excise duty, service tax at the Central level and VAT at the state level, Patil said the government will vigorously pursue the matter.


Image: A homeless woman and her son take shelter inside a pipe in Kolkata.
Photographs: Jayanta Shaw/Reuters
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What the govt will do on illegal money

"My government is fully seized of the issue of illegal money of Indian citizens outside the country in secret bank accounts. It will vigorously pursue all necessary steps in coordination with the countries concerned," Patil said in her address to Parliament.

The new government agenda, as reflected in the President's address, deals with a topic that became an election issue.

The Bharatiya Janata Party, had blamed the government for not making efforts to bring back into the country as much as Rs 25 lakh crore worth of black money stashed in foreign banks.

The issue also went to the Supreme Court, where the government filed an affidavit stating it has received information about Indian account holders in a German Bank. But it did not reveal the names on grounds of "confidentiality".

It had said that the German government provided the information on March 18 this year about the Indian account holders in the LGT Bank, Liechtenstein. On the issue of deposits in banks in Switzerland, the affidavit said the government has acted with utmost expedition.


Image: A man cycles during snowfall in Zurich, Switzerland.
Photographs: Arnd Wiegmann/Reuters
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