New Delhi, Nov.24 : At a time when the country is faced with challenging times in the wake of global economic slowdown, the former Finance Minister and senior Bharatiya Janata Pary leader, Yashwant Sinha, believes there is need to adapt demand-boosting measures to ensure a bright future for the country.
"It's the cost of money which is the huge dampener. It has affected affordability at the corporate-level. It has affected affordability at the individual level," said Yashwant Sinha in interview with Asian News International.
"In my time (tenure as the finance minister) also, inflation had gone upto 8 per cent but we did not take monetary measures to control inflation. Because we knew that inflation will spend itself. And even today, I'd like to say that it's not the government's policies or measures but the collapsing commodities prices which is bringing down the inflation the world over and also in our country."
The wholesale price-based inflation came down to the level of 8.9 per cent on the week ended November 8 after remaining 21 consecutive weeks in double digits.
While the government hopes to contain the fiscal deficit within the limit of three per cent for the current fiscal, Sinha believes that the government is already running under higher fiscal deficit what the actual data shows. But Sinha advocates it is better to not to say over absorbed by the mounting fiscal deficit.
"At this point of time, it's a catch-22 situation because the government will have to run even larger fiscal deficit in order to spur the demand. But it's possible to do it. Therefore, we should be able to find the resources which will enable us through public private partnership, through government initiatives, through private sectors' initiative to raise both, the consumer demand as well as the investment demand in or economy."
Recounting the initiatives, taken by the National Democratic Alliance (NDA) government, Sinha reiterated his faith in the domestic demand-based economy.
"Why did we start National Highway Development programme? It was not only because it was needed but also because it created a large quantity of demand for cement, for steel, for other building materials. Why did we start housing revolution... because that is the huge consumer of steel, cement and all other building material. And, that is what had pushed the economy to the growth that we have noticed in the last few years," Sinha informed.
"There is a huge unmet demand in India and anything which is done to energize that demand, it would be extremely helpful. So (whether, there is a) global crisis or no global crisis.....that unmet demand is actually there," Sinha added.
Sinha believes that the so-called 'global financial crisis' as not a problem but a golden opportunity for Indian economy, which is not so dependent on international market for future growth. By Ashwani Upadhyay