Hyderabad: IT and Industries Minister K T Rama Rao on Friday said the Union government should take bold and innovative decisions and give a free hand to States in matters of finance if it wants to reach the ambitious target of a $5 trillion economy.
He was speaking at a session on “March to $5 Trillion Economy: Reality or Ambitious” at the National Association of Software and Services Companies (NASSCOM)’s Technology Leadership Forum 2020 in Mumbai.
CP Gurnani, Managing Director and Chief Executive officer of Tech Mahindra, kick-starting the discussion, sought the young leader’s opinion on achieving the $5 trillion dollar economy, in the light of Telangana State’s magnificent growth in IT, service, manufacturing and agriculture sectors faster than the national average.
“I am upbeat about the development prospects of the country, but to achieve the set target, the Centre must take innovative and bold decisions. We expected the Union government to take such initiatives but it has failed to do so. Whether the Centre agrees or not, the numbers are saying that the economy has been on the downtrend for the past two to three years,” Rama Rao said.
The Minister said it was time for the Centre to acknowledge the fact that growth of States is indispensable for the growth of the nation. “The Centre must follow fiscal federalism in its true spirit. States such as Telangana that are on faster growth trajectory are facing shortage of capital. Huge amounts are required to create infrastructure,” he said, adding that States should be allowed to scout around for cheaper capital like countries in North America, Europe and Japan to spend on massive infrastructure projects.
The Central Wall
“Even if the investors are ready to set up shop in a progressive State like Telangana that has conducive atmosphere for business, tough Central laws and regulations placed on foreign firms and financial institutions have become a huge hindrance. If we (States) are stopped from taking up major investment decisions, how will the country achieve the $5 trillion economy?” Rao questioned. He also suggested liberalization of FRBM (Fiscal Responsibility and Budget Management) limits set by the Union government to tackle the issue of cash crunch faced by State governments.
“We have been blamed for piling debts when we try to raise loans and take up infrastructure projects. This is nothing but a primitive economic thought that negates the very fact that all the developed economies have created wealth by spending on infrastructure in a big way,” the Minister pointed out.