PM to discuss global impact with corporate chiefs today

NEW DELHI: Prime minister Manmohan Singh is likely to discuss the impact of global demand contraction on Indian economy with industry leaders here on Saturday, ahead of the G-20 summit in London next week.

Those invited for the interaction with the prime minister include Tata group chairman Ratan Tata, Reliance Industries chairman Mukesh Ambani, Reliance-ADAG group head Anil Ambani, Wipro chairman Azim Premji, Bharat Forge���s CMD Baba Kalyani and presidents of Ficci, CII and Assocham.

The corporate leaders are expected to give key inputs to Mr Singh for the summit of world���s most influential developed and developing countries, to be held on April 2. The prime minister would be leaving for the summit on March 31.

High cost of finance and inadequate liquidity remain critical issues for industry. Business leaders feel the Indian economy faces the paradox of near-zero inflation but high interest rates.

One of the problems, they say, lie with a high level of government borrowings which would be sucking out liquidity from the system, keeping pressure on interest rates.

The government will borrow an additional Rs 1,40,000 crore during the first half of next fiscal to fund its increasing public expenditure.

Meanwhile, top government officials expressed confidence at the revival signs, at the annual session of industry chamber CII in Delhi on Friday. The early signs of revival are expected to pick up from here with further stimulus measures. ���While it will be up to the next government to prepare a roadmap for further fiscal stimulus measures, we will continue to ease procedural bottlenecks for exports and imports,��� secretary (economic affairs) Ashok Chawla said. However, he added, ���unless all major economies of the world work together and the US fixes its plumbing, the problem in the rest of the world, including India, will not go away���.

The government is also focusing on ensuring the money allotted to states is spent. ���We are trying to ensure that the Rs 3 lakh crore is spent by the states. We are working towards resolving the problems to enable this spending. The current opportunity is being used to provide development in the most backward states,��� Planning Commission secretary Dr Subhash Chandra Pani said.

This growth is expected to gather momentum with the global economy improving. The government is of the opinion that the fall in exports has bottomed out. ���We will be lucky if we are able to touch the export target of $170 billion this year. However, we are expected to touch the $170-175-billion export target in the coming fiscal,��� secretary (commerce) GK Pillai said.