Mumbai: The government will focus on acquiring raw material assets abroad as it seeks to boost economic growth to double-digit levels, finance secretary Ashok Chawla said on Friday.
Growth agenda: Finance secretary Ashok Chawla. Abhijit Bhatlekar / Mint
Citing the example of the oil sector that had acquired such assets, the finance secretary said this policy “will be extended to other sectors of manufacturing” at Beyond Budget 2010: The India Agenda, an event organized by Mint in Mumbai.
“The government is engaged in preparing a policy for the manufacturing sector that will focus on acquiring raw material (assets) abroad wherever it is necessary,” said Chawla.
Economists and policymakers say supply constraints in areas such as foodgrain, raw materials and infrastructure could prevent the economy from accelerating to double-digit levels, which the government says is needed to eradicate poverty and boost jobs.
Two weeks ago, the petroleum secretary had suggested that the country’s foreign exchange reserves be used for buying energy assets abroad. State-owned Oil and Natural Gas Corp. Ltd (ONGC), the country’s largest oil producer, has so far bought oil fields through its arm ONGC Videsh Ltd in Brazil and Russia among other countries.
“The manufacturing sector is showing a renewed energy, a renewed vigour”, but it needs to be “at the vanguard of industrial development”, said Chawla. The government will focus on supporting the sector not only because it provides employment, but also because it needs to get to the next level, the finance secretary said.
Budget discussion: (From left) Sanjay Nayar, CEO of Kohlberg Kravis Roberts and Co. India; O.P. Bhatt, chairman of State Bank of India; Rakesh Mohan, former deputy governor of the Reserve Bank of India; Tamal Bandyopadhyay, deputy managing editor of Mint; Union finance secretary Ashok Chawla; M. Damodaran, former chairman of Securities and Exchange Board of India; and R. Gopalakrishnan, executive director of Tata Sons, during Mint’s Beyond Budget 2010: The India Agenda conference in Mumbai. Photo by Abhijit Bhatlekar/Mint.
India’s manufacturing sector needs to “join the comity of nations whose manufacturing sector can take on the world”.
Chawla said the finance minister himself will chair the proposed super regulator—the Financial Stability and Development Council. He said this won’t detract from the role of the Reserve Bank of India.
“All it means is that at the top of the pyramid there will be an apex regulator,” he said.
While reiterating that fiscal health was the overriding message of the Budget, Chawla said the government will focus on agriculture, infrastructure, improving skill-sets of employable Indians and reforming the delivery system of basic social services.
Sandeep Singh is with Hindustan Times.