PM meets top advisors, calls for ‘animal spirit’ in Economy

New Delhi. Just a day after Pranab Mukherjee’s resignation as a Finance Minister, Prime Minister Manmohan Singh on Wednesday has given an indication that he is keen to bring the economy back on track. On Wednesday, he met Planning Commission Deputy Chairman Montek Singh Ahluwalia, PMEAC Chairman C Rangarajan and top Finance Ministry officials.
Taking stock of the country’s economy in a series of high level meetings here, he identified tax issues, sluggishness in insurance sector and aspects related to mutual funds as problem areas and pressed for quick corrective steps.
He will meet RBI Governor D Subbarao and Planning Commission members tomorrow as part of his review of affairs concerning the economy.
The Prime Minister asked the ministry officials to revive the animal spirit in the country’s economy.
He further said, “In the short run, we need to revive investor sentiment, both domestic and international.”
The Prime Minister also pointed that the need of the hour was to manage the balance of payments, for which institutional inflow was needed.
Addressing Finance Ministry officials, he said, “Immediate emphasis is to manage balance of payment for which all policies should be directed to help institutional flows to India.”
“Reverse the climate of pessimism… Revive the animal spirit in the country’s economy,” Singh said, while observing that India was passing through challenging times economically.
He noted that the growth rate has taken a dip, industrial performance is not satisfactory and “things are not rosy” on the investment front while inflation remains a problem.
“In the short run, we need to revive investor sentiment, both domestic and international,” he said.
Talking about the problems, Singh said he referred to the “tax front”, mutual fund segment and slowdown in insurance sector “which is not normal in a country with large unmet insurance needs”.
“This needs to be looked into,” he said but did not elaborate.
“Immediate emphasis is to manage, balance of payment for which all policies should be directed to help institutional flows to India,” the Prime Minister said, a day after Pranab Mukherjee quit as the Finance Minister to contest the Presidential poll.