6% growth achievable: India Inc.

NEW DELHI: India Inc. believes that the government will need to focus on pushing industrial growth and creating the right environment for attracting foreign capital, if it is serious about achieving a 6 per cent in 2002-03.
The comments came in as a reaction to Prime Minister Atal Bihari Vajpayee''s statement on Wednesday that the country''s economy was expected to grow at more than 6 per cent in the present fiscal and that there was "unprecedented" price stability in the economy.
Jardine Fleming''s Chief Investment Officer in India, U R Bhat said: "It is not just enough to hope that the GDP growth will be more than 6 per cent, a good follow-up action is expected of the government".
He said the government must focus on kick-starting the economy with "renewed vigour". The government should also try and create the right environment for FDI inflows and specifically focus on infrastructure development.
"I would say that Vajpayee''s statement is not outlandish. Last year, the GDP grew at 5.4 per cent, up from 4 per cent in the previous year. Therefore, the additional growth is quite possible - but the government has to work towards it".
Vajpayee’s political opponents too feel that the target is achievable, but will not let the government take credit for it. "After a 5.4 per cent growth in 2001-2002, 6 per cent is no great shakes. If you say 7 per cent, then it would mean something. In fact, if you don’t get 6 per cent, it is a problem", says Congress economic wiz Jairam Ramesh.
The market was, however, broadly lacklustre - reflecting the marketmen''s unwillingness to rally around Vajpayee''s statements. So much so, even the encouraging results from infotech major Infosys failed to cheer up the markets.
Selling pressure was palpable in the broader market with mid-cap stocks also witnessing considerable selling pressure. The BSE Sensex was at 3,343 (down 16 points), while the NSE Nifty was at 1,076 (down 4 points). The rupee was trading at Rs 48.70 per US dollar.
A CEO of a Mumbai-based financial services firm said: "The market has completely ignored Vajpayee''s pep-talks. But, I would say that if Vajpayee has made such statements, he must be having plans. I am hopeful".
The Prime Minister addressing a Trade Council said on Wednesday that there has been unprecedented price stability. He specifically highlighted that inflation was around 2 per cent and that the forex reserves have grown to $58 billion "which provides more than 13 months of import cover, the highest for any country excepting China."
JM Mutual Fund CEO Krishnamurthy Vijayan said: "If the country achieves a more than 6 per cent GDP group, it will be commendable. It will also provide a great boost to the market. The question is will it?"
That''s a question which Vajpayee''s new look Cabinet team needs to answer - fast.