News on the economic data front is not comfortable for the Narendra Modi government. They show how Herculean the task is to improve the economic growth rate. The data released on Friday show that the Gross Domestic Product (GDP) grew at only 4.7 per cent during the year 2013-14, against the projected 4.9 per cent. In the last quarter of the year under review, the GDP grew at only 4.6 per cent. This shows that there has been no sign of any recovery in growth. In February when the UPA government claimed that the worst days were over and the year would end up with a 4.9 per growth, this newspaper had raised doubts about the claim.
What is worrying is that the economy continues to remain in the doldrums. Worse, there are also fears of an El Niño-induced drought that will make matters worse for the government. Finance minister Arun Jaitley has already said that restoring growth would be his first priority. The first Budget of the new government is not expected before the first week of July. In other words, it does not have much fiscal space for any big-ticket spending plans to boost growth. The government’s top priority now should be to revive the economy by improving the business climate through a swift resolution of issues pending before the government.
For one reason or another, the UPA government had failed to take decisions that would have resulted in economic rejuvenation. It is in this context that prime minister Narendra Modi’s directive to the environment minister to clear all pending files within 10 days should be seen. Clearing such files alone will result in investment of hundreds of crores of rupees in sectors like mining and construction. Similarly, hundreds of projects are unable to take off because of the government’s failure to clear files related to land acquisition. Pending projects need to be cleared on a war-footing so that they can encourage greater investment. Economic revival is possible only if there is a boost to investment—domestic and foreign.