FM meets leaders of India Inc to discuss economic scenario

The Finance Minister Pranab Mukherjee on Monday met top leaders of India Inc - including Ratan Tata, Anil Ambani and Sunil Bharti Mittal - to discuss the state of the economy, and the government's reform agenda.

Finance Minister Pranab Mukherjee and Commerce and Industry Minister Anand Sharma were closeted with the industry leaders, also comprising Anand Mahindra, Shashi Ruia, V Narayana Murthy and YC Deveshwar.

"There has been some cynicism expressed of late regarding lack of movement on policies and institutional processes. I find this view to be based more on perception than facts," Mukherjee said in his opening remarks.

The corporate honchos after a two-and-a-hour meeting appeared re-assured.

"If there was a trust deficit, it was dispelled today ...it vanished today. There was an assurance on time bound action on our proposals," Mahindra said.

Echoing the sentiment, Ambani said: "The interaction will certainly go a long way in building the momentum needed to catalyse economic growth."

Mittal said: "Discussions took place in a frank and open manner".

Sharma said the government remained fully committed to the reforms agenda. Several initiatives are in the pipeline and would be rolled out soon.

The industry was asked to give five specific suggestions for re-energising the economy.

The meeting took place against the backdrop of slowdown in industrial production, rising cost of borrowing and global uncertainties, even as there were perceptions about policy paralysis in the government.

Mukherjee said: "Weakening of business sentiment is partly due to an uncertain global environment and perhaps also on account of rising cost of domestic credit".

He said a tight monetary policy has been necessitated because of the continuing challenge posed by inflationary pressure. Inflation was 9.44 per cent in June. RBI has raised key interest rates 11 times since March 2010 to tame the rate of price rise, leading to overall hike in borrowing costs.

Mukherjee said the fundamentals of the Indian economy remained strong and the growth drivers in the medium term remain broadly intact.

V Narayana Murthy expressed hope that the government would try to solve the problems of the industry. "They (government) wanted to listen to us...By and large they would certainly try and help us," he added.

RP Goenka also expressed hope that there will be cooperation between the government and industry.

Talking about the reform agenda, Mukherjee expressed confidence that important financial sector legislations, like Banking Laws Amendment Bill, Pension Fund Regulatory and Development Authority Bill and Insurance Laws Amendment Bill would be passed in the ongoing Monsoon session of Parliament.

He also said the report of BK Chaturvedi Committee on issues relating to reconciliation of environmental concerns and coal mining will be discussed by GoM later this week.

The minister said the reports of the Viond Dhall Committee - on the public procurement standards and policy - and the Ashok Chawla Committee - on allocation and pricing of natural resources - are being examined by Committee of Secretaries. The GoM will consider them by month end, he added.

--With PTI inputs