PM initiates steps to boost sagging economy

Faced with difficult times, the government today took a few more steps to soothe investors and "stay course", with Prime Minister Manmohan Singh stepping in to form a ministers’ panel to thrash out problems in the coal sector and convening a meeting on Wednesday to review the big-ticket infrastructure projects.

Joining the government, the Reserve Bank of India sent assuring signals to the market by indicating that it may further cut interest rates later this month.

While addressing the Congress Working Committee (CWC) meeting here, the Prime Minister said the country should “stay course” in difficult times, Finance Minister Pranab Mukherjee listed positives in the falling crude oil prices and expectations of a normal monsoon.

The markets reacted well to these remarks even as global stocks came under pressure. After plunging over 200 points to its lowest level in five months, the Sensex closed 23.24 points higher.

With projects worth Rs 1.46 lakh crore pending, the Prime Minister will review with senior Cabinet colleagues the status of the infrastructure sector.

Projects worth Rs 1.46 lakh crore are pending because of absence of regulatory clearances. These are in the sectors of power, steel, highways and cement. The meeting assumes significance as it comes against the backdrop of economic growth falling to nine-year low of 6.5 per cent in 2011-12 and contraction of industrial output in the March quarter.

Singh has also approved formation of a nine-member ministerial panel to sort out differences over the draft Bill for setting up a regulatory authority for the coal sector.

"The Prime Minister has approved the formation of a Group of Ministers (GoM) (to look into the draft Bill). The government has notified the formation of GoM today," a top Coal Ministry official said.