Committed To 'Difficult Decisions' To Boost Economy: PM

Tokyo: Prime Minister Manmohan Singh said the Indian government was committed to taking "hard and difficult decisions" in the long term interest of the country's economy.

"I want to assure you that our government is committed to take hard and difficult decisions in the long term interest of our economy," the prime minister said in an address to business and industry leaders at a luncheon hosted by Nippon Keidanren, Japan's business federation.

"In recent months, we have taken a number of steps to revive the economy. We have started to bring the fiscal deficit under control and also outlined a medium term path for fiscal consolidation. We have accelerated the implementation of large infrastructure projects by setting up special mechanisms to ensure that various regulatory clearances do not lead to delays. We have taken tangible steps to enhance incentives for investments," he said.

"We have liberalised foreign investments in areas like multi-brand retail, power exchanges and civil aviation and further rationalization and simplification is being planned. We have introduced further reforms in the financial markets. The central bank has indicated that it will start the process of expanding grant of new bank licenses," he pointed out.

Aiming to give a boost to trade and investment between India and Japan, the prime minister said that Japanese banks were being given licenses to open branches in metropolitan areas in India and added that his government was willing to resolve problems relating to long term swap arrangements.

Hoping for a turnaround on investment from Japan to India and trade between both countries, the prime minister said that this was much less than the available potential.

Sounding an optimistic note, Manmohan Singh said: "A number of priority projects for implementation from the first tranche of $4.5 billion provided by Japan for the project have been listed. We have resolved the issues of priority sector lending treatment to Delhi Mumbai Industrial Corridor (DMIC) projects. Restrictions on foreign currency borrowings have been relaxed.

"I understand a few problems remain relating to long term swap arrangements. We are willing to consider innovative suggestions to resolve these problems. I am also happy to say that Japanese banks are being given licenses to open branches in metropolitan areas.

"I am told that Japanese companies rank India the most promising long term destination. However, India accounts for only four percent of total Japanese outward investment flow into Asia. I am sure you will agree that this percentage should be much higher. We on our part will work hard to turn promise into reality."

Manmohan Singh, who is on a three-day visit to Tokyo to boost strategic, economic and energy ties, said the present bilateral trade of $18 billion "does no justice to our potential".

"We must harness the full potential of our Comprehensive Economic Partnership Agreement to expand our trade and make it more broad-based and balanced. I hope that Japan would be more open and accessible for Indian companies in our areas of strength, such as pharmaceuticals and IT services," the prime minister said.

He pointed out that two ongoing flagship projects of the India-Japan partnership, the Western Dedicated Rail Freight Corridor between Mumbai and Delhi and the associated DMIC were making good progress.

Calling upon Japanese business and industry leaders to invest in India's infrastructure sector, where it has targeted an investment of around $1 trillion, Manmohan Singh said: "I understand that Japan has also offered financial and technical support for a Detailed Project Report for the Mumbai-Ahmedabad High Speed Railway route.

"This is an ambitious project and we will need to take a holistic view, based on our infrastructure needs, commercial viability, overall national priorities and the availability of financial resources. We are willing for Japan and India to co-finance a joint feasibility study on this."

"For many years, Japan has been our largest bilateral donor and we are grateful for the assistance we have received. Japanese assistance has financed some of our most iconic infrastructure projects such as the Delhi Metro and now the Dedicated Freight Corridor...

"The Maruti-Suzuki partnership is a household name in India. There are other similar examples," he pointed out.

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