Pranab promises fast policy action

OUR SPECIAL CORRESPONDENT

Pranab Mukherjee in Mumbai on Saturday. (PTI)

Mumbai, June 16: As he gets ready to move to Raisina Hill, Union finance minister Pranab Mukherjee today had some encouraging words for India Inc, which has been critical over the policy paralysis at the capital.

Mukherjee today said even as the Centre was doing its bit to bring the economy back on growth path, the Reserve Bank of India could also lower interest rates.

A day after he was nominated as the Presidential candidate, Mukherjee today said the Centre had been taking various steps to address concerns expressed not only by Corporate India, but also international credit rating agencies to dispel the recurrent talk of policy inaction by the Centre and the North Block.

Addressing a seminar organised by Assocham, the finance minister said he was aware of the challenges India was facing and expressed the optimism that measures taken by the government would yield results soon.

"As finance minister, I cannot ignore the ground realities and areas of difficulties and also the apprehensions expressed sometimes by captains of industry, sometimes by credit rating agencies. As finance minister, I do not dismiss their concerns. I take serious note of their concerns and try to find out what is to be done, that is the exercise which I have done all three years starting from January 2009,'' he said.

The finance minister also had a word of advice for India Inc. Admitting that there was a "negative sentiment'' when it came to investment, he said the country had to find its own solution to the problem.

"My only request to leaders and captains of industry is that we should take note of these areas of difficulty, but we will have to find our own solutions. I believe industry has the resilience, the economy has the resilience and we are competent to rise to the task of meeting grave challenges,'' he said.

Mukherjee further expressed the hope that the Reserve Bank would bring down interest rates to stimulate the economy.

The RBI is set to announce its mid-quarter review of the monetary policy on Monday and it is widely expected to bring the policy rate at least by 25 basis points.

"I am confident that keeping in view all the factors, the RBI will adjust the monetary policy as we are adjusting the fiscal policy," he added.

Rupee volatility

Expressing concern over rupee volatility, Mukherjee today said there was an urgent need to diversify the country's export markets.

"The volatility of the rupee is still a matter of concern. And in the context of the current account deficit and going by the slow exports growth, (this) clearly demands that we must diversify our export destination and also our export basket," said Mukherjee.

He added that there was a need to encourage people to invest in market instruments. The minister regretted that people were investing in gold with the expectation that the value of their investment would appreciate. "Quantum of import of gold ... is a clear indication (that) large section of community...want (to) investment in dead asset only with expectation that its value would appreciate," he said.