The Hindu Business Line : Hard choices ahead for Govt: PM

THE Prime Minister, Dr Manmohan Singh, on Saturday hinted at hard choices and decisions ahead for his Government, while making it clear that development is not going to be a free dinner party.

Recalling the days of 1990-91 when India was on the verge of a default on external payments, the Prime Minister said the country's sterling reputation in fiscal management helped it earn support in the various capitals of the world and in the boardrooms of multilateral financial institutions.

"While we do still have unacceptably high fiscal deficits, and we must bring the level down, our record of fiscal management, and the transparency of our budget process as well as the health of our financial system have served us well," Dr Singh said while addressing the Silver Jubilee of the Centre for Economic and Social Studies (CESS) here.

He, however, said the country could not afford to rest on these laurels. It should continue to strive hard to retain the reputation for sound fiscal management. "I do sincerely believe that it is only on the basis of much higher growth, of incomes and revenues, that we can sustain higher social expenditures," the Prime Minister said.

Stating that the State Governments have an important role to play in this regard, Dr Singh said, "I have decided that during the course of this year, I will interact more with Chief Ministers so that I can work with them in pursuing sound economic policies. I am beginning this process here today in Hyderabad. "A large part of the economic agenda has to be pursued at the State level by State Governments. In vital areas such as infrastructure, especially power and roads, agriculture and in education and health, there is much we can do at the State level that will have beneficial consequences for the country as a whole."

Committee of CMs on power sector reforms

Learning from the success of the VAT process, the Union Government proposes to create an Empowered Committee of Chief Ministers on power sector reforms, the Prime Minister said.

The Prime Minister pointed out that the Government has two important responsibilities in promoting more equitable development. First, it should pursue sound macro-economic policies and encourage new investment.

Second, the Government must provide social safety nets and social insurance to protect workers, farmers, the self-employed and professionals from the downside.