Government will back up RBI measures to boost growth: Pranab

The government will supplement the Reserve Bank's decision to cut lending rate by 0.50 per cent with further measures to control price rise, encourage investments and boost growth, finance minister Pranab Mukherjee said today.

"The monetary policy announcements should help in investment revival and contribute to strengthening of business sentiments. In the coming weeks we will take some additional steps to further reinforce focus on growth," Mukherjee said on the sidelines of the annual general meeting and national conference of the Confederation of Indian Industry (CII) in New Delhi.

"The growth, which has weakened in past months, should now improve," he said.
 
The government, he said, is committed to creating a conducive policy environment to attract both domestic and foreign private investment. He listed several policy measures like the notification of guidelines for setting up the Infrastructure Debt Fund, further liberalisation of external commercial borrowings (ECB) policy, the New Manufacturing Policy, etc.

Besides, he said, the budget for 2012-13 has extended the scope of viability gap funding to include some more sub-sectors and the harmonised list of infrastructure has been notified to remove ambiguity.

The budget for 2012-13 estimates the government's fiscal deficit to come down to 5.1 per cent of GDP, from the revised 2011-12 estimates of 5.9 per cent. The medium term fiscal policy statement 2012-13 places the fiscal deficit at 4.5 per cent and 3.9 per cent, respectively, in the next two years, the finance minister said.

The medium term fiscal stance is thus firmly on the fiscal consolidation path with the revenue deficit sought to be eliminated in 2014-15, he said, adding, ''Gross outstanding liabilities of the centre are estimated to decline from 45.7 per cent in 2011-12 to 41.9 per cent in 2014-15.