Union Finance Minister At Coimbatore
Union Finance Minister P. Chidambaram has urged “patience,” saying the anti-inflation measures will bear fruit. He was talking to reporters on the sidelines of a function to open the Coimbatore Passport Office on Sunday. “I have been advising patience, and that is my reply even today.” “Inflation has reached a moderate stage now, and it will come down further to become normal,” he said. As for pay revision for insurance and bank employees, Mr. Chidambaram said he had asked the United Forum of Bank Unions, the Indian Banks Association and the insurance employees to expedite the negotiations and bring the recommendations to the Ministry for a final decision. Though the government accords priority to agriculture, Mr. Chidambaram said, investments in the industrial sector should not stop, as the nation’s economic growth hinges on this sector. Launching the 80th anniversary celebrations of the Indian Chamber of Commerce and Industry, Coimbatore, he said agriculture could at the most grow by 4 per cent a year, but this was not enough to eliminate poverty. On the other hand, he pointed out, trade and industry were driving the economy to grow faster.
Unveiling the portrait of the former Union Finance Minister and first president of the Chamber, R.K. Shanmugham Chetty, Mr. Chidambaram compared the industrial growth and investment position in the southern, western and northern States with those in the central and eastern regions. All the southern States, barring Kerala, did well. So did Gujarat, Maharashtra, Punjab and Haryana. But those in the central and eastern regions did not. Investors were even withdrawing from some areas because of a hostile atmosphere. This should not happen in Tamil Nadu.
Mr. Chidambaram included the service sector in the industry, arguing that this also played a key role in growth, contributing 56 per cent to the Gross Domestic Product. In fact, the service sector grew to that level when the industrial sector stagnated at 27 per cent because of roadblocks in investment. The fast-paced growth in the early 1990s slumped later. It revived in 2004, and the country achieved an unexpected growth of 8.9 per cent over four consecutive years. This was owing to the industry and the service sectors, he said. “I keep explaining the reasons behind the 8.9 per cent growth because some people keep ridiculing it. I have to keep explaining this as long as they ridicule it.”
There was a little slump in investment, from 9 per cent to 8 per cent, but this fitted a global pattern. India, however, had held on at 8 per cent while Japan and the U.K. had declared a recession. And Europe was not hopeful of achieving even two per cent this year. Growth would rise again in India, but more investment was needed, he said. Mr. Chidambaram called for creating a long-term time-horizon for investors: to make investments and enable growth to happen. “We have asked banks to give loans to those who want to invest. At the same time, every trade and industrial association should watch how and where its members invested.
The only area of concern was power generation, especially additional capacity, he said. During the past three Five Year Plans, the additional capacity created amounted a mere 57,000 MW. To address this problem, the 2007-2012 Plan had set a target of 78,500 MW. China added one lakh MW every year because of investment. “We have funds, but our schemes are not being completed.”
