More FDI reforms on the anvil: PM

Says RBI steps are not meant to signal rise in long term interest rates

Conceding that the high current account deficit (CAD) and the rupee depreciation have aggravated the macro economic situation, Prime Minister Manmohan Singh said that more Foreign Direct Reforms are on the anvil while listing out the various positive measures undertaken by the UPA government to improve the country's finances and bolster growth.

Earlier, in the week the government had rolled out big-bang reforms by easing the FDI caps in sectors such as telecom and defense.

He was speaking at the inaugural session of the annual meet of industry body ASSOCHAM.

PM said FY14 growth will be less than 6.5%.

Singh also attempted to silence the government's critics by saying they are just focusing on one bad year and the average GDP growth in the last eight years of the UPA has been 8.2% per annum as compared to 5.7% during the last eight years.

Talking about the issue of the high CAD which stood at 4.7% of the GDP last year, Singh said, "I can assure you that we are committed to bringing down the CAD and for that both demand and supply side of the issues have to be addressed."

The target is to bring down CAD to 2.5% but it is not possible to do it in a year. He added that the recent measures to reduce the demand for gold have borne fruit with gold imports sharply declining in June.

However, he said that the positive impact of the measures taken to correct the petroleum prices have been slightly dented due to the depreciation of the rupee against the dollar.

On the issue of the rupee's slide, he said that the central bank is doing its bit to stabalise the market, however, the recent measures taken by the RBI "are not meant to signal long-term high interest rates."

Singh added that if the situation improves, RBI can even consider reversing some of those measures.   

Singh also talked about the various policy measures taken up by government such a development of two new ports in Andhra Pradesh and West Bengal, new airports in Navi Mumbai and Pune, elevated freight corridor between Mumbai and Ahemdabad apart from amendments in the banking law, roll out of the direct cash transfer scheme etc.