The Hindu Business Line : Cut costs, raise productivity: PM

New Delhi, Nov. 3 Public sector banks have been instructed to “act counter cyclically in the current situation to counter the general erosion of confidence” and minimise the negative impact of the current global crisis on the real economy, the Prime Minister, Dr Manmohan Singh, said here on Monday.

Calling on the industry to make every attempt to cut costs and raise productivity, Dr Singh hoped that they would not take any knee-jerk reaction such as large scale lay-offs to overcome the global economic crisis.

“The industry must bear in mind its societal obligation in coping with the global crisis. The Government and the industry must act in a true spirit of partnership to meet the challenges that lie ahead. I would like to assure each one of you that the Government will take all necessary monetary and fiscal policy measures on the domestic front to sustain our growth rate,” Dr Singh said.

The Prime Minister added the Government is able to act more boldly because efforts to contain inflation have begun to be effective.

“Movements in the wholesale price index over the past six weeks suggest a definite abatement of the inflationary process,” Dr Singh said.

Infrastructure growth

The Government was also closely monitoring the macro economic situation and was fully alive to its responsibility for sustaining the growth momentum at a reasonable level. Pointing out that expanding investment in infrastructure can play an important counter-cyclical role, the Prime Minister said that the Government will review projects and programmes in the area of infrastructure development.

These will include both public sector projects and public-private partnership to ensure that their implementation is expedited and they do not suffer from constraints of funds.

Special cell

Briefing newspersons after the meeting, the Minister for Commerce, Mr Kamal Nath, said that the Prime Minister has assured that a special cell will be set up to look at various issues that would come up from time to time.