He conceded that the economic growth in 2013-14 will be lower than the target of 6.5 percent but said even a turnaround from 5 percent achieved in 2012-13 would be important. (Agencies)
"The most immediate cause of worry is the recent volatility in foreign exchange market...The RBI has done its bit to mobilize market expectations. More recently, it took additional steps to raise short-term interest rates. These steps are not meant to signal an increase in the long term interest rates. They are designed to contain speculative pressure on currency. Once these short term pressures have been contained, as I expect they will be, the Reserve Bank can even consider reversing these pressures," he said addressing annual meeting of Assocham.
On the other problem of current account deficit (CAD), he said, the government would use all policy instruments available -- fiscal, monetary and supply side interventions -- to ensure that CAD declines further over time.
Asserting that the basic fundamentals of economy were sound and healthy, the Prime Minister said the government has been taking all measures to correct imbalances on the macro front.
Making it clear that the government needs to take steps to revive the momentum of investment, he said many projects that have been held up for lack of regulatory approvals were being expedited and big-ticket projects will be identified to clear the hurdles.
Singh said infrastructure was absolutely critical for medium term growth prospects and progress on them was being monitored on a quarterly basis. He listed a number of initiatives being pursued that include setting up two major ports in Andhra Pradesh and West Bengal, new airports in Navi Mumbai, Juhu, Goa, Pune and Kannur.
The Prime Minister said while FDI has been liberalise in single brand retail, multi brand retail, civil aviation and power exchanges, "more FDI reforms are on the anvil". A new banking licensing policy has been announced and new licenses are soon to be awarded, he added.
He conceded that the economic growth in 2013-14 will be lower than the target of 6.5 percent but said even a turnaround from 5 percent achieved in 2012-13 would be important.