PM vows reforms 'at top speed'

PM Narendra Modi also committed to cap fiscal deficit at 4.1% of GDP

The economy will witness further reforms, said Prime Minister Narendra Modi on Friday, promising such measures at “top speed”.

He indicated a wish to increase the size of the economy to $20 trillion from the current $2 trillion.

The steps could include improving the ease of doing business, a positive regulatory framework, tax stability and a boost to infrastructure.

Ahead of the Budget, the PM reiterated the government’s commitment to the earlier target of a fiscal deficit not more than 4.1 per cent of gross domestic product for 2014-15. The year’s first eight months saw it cumulate to almost 99 per cent of the estimate. At an event here, Modi rapped the previous United Progressive Alliance government for economic growth slowing to below five per cent in 2012-13 and 2013-14.

Asserting development had to result in jobs, he said the government would change rules, reform the tax system and target subsidies to the needy.

“A positive regulatory framework, tax stability and ease of doing business are being pushed ahead at top speed...We are cutting on multiple clearances that choke investment. Our complex tax system is crying for reform, which we have initiated. I believe in speed, I will push through change at a fast pace. You will appreciate this in times to come,” he said.

Maintaining that improvement in governance was a continuous process, Modi said government was making changes wherever rules and procedures were not in tune with the need.

“Reforms are not an end in itself; these must have a concrete objective, to improve the welfare of the people,” he said.

On energy sector reforms, he said transparent allocation of coal and other mined minerals through auction had been decided and “similar reforms are on the way in the power sector” to deliver 24×7 electricity for all.

“India is being made an attractive destination for investment,” he said. He referred to the relaxation in foreign investment caps in insurance, real estate, defence and railways, plus a change in the land acquisition law, as boosting infrastructure and manufacturing, while protecting compensation to farmers.

After two back-to-back years of below five per cent growth, governance at rock-bottom and a series of scams, he declared, transition to a new India had begun.