Don't blame Pranab Mukherjee for slow growth: Montek

Planning Commission Deputy Chairman Montek Singh Ahluwalia has said that the Finance Ministry under Prime Minister Manmohan Singh will very quickly "resolve" uncertainty among investors caused by anti-tax avoidance rules which were unveiled in the Budget. Talking about former finance minister Pranab Mukherjee, he said that it was not right to put the blame for slow growth on any one person.

Speaking to Karan Thapar on Devil's Advocate, he said that General Anti Avoidance Rules (GAAR) is a larger issue and it "caused lots of uncertainties among investors".

Here is the full transcript of the interview:

Karan Thapar: Hello and welcome to Devil's Advocate. What are the steps the government needs to take to restore growth, revive investor's sentiment and remove the clout on the economic horizon? That's the key issue I shall discuss today with the Deputy Chairman of the Planning Commission Montek Singh Ahluwalia. Mr Ahluwalia, after the charge of the Finance Ministry, the Prime Minister spoke of reviving animal spirits, restoring investor's sentiment and reversing the climate of pessimism, does that mean that it is imperative for the government to act decisively and quickly?

Montek Singh Ahluwalia: Absolutely, I think that is exactly what the Prime Minister meant and that's what you should do.

Karan Thapar: And there is a hint that it is a serious situation.

Montek Singh Ahluwalia: It is true that for us to blame the world is wrong, there are lots of things domestically that needs to be corrected and I think that's what we should do.

Karan Thapar: Let's then come to the key problems we face and ask them one-by-one what you think should be done about them. First growth, last year it fell to 6.5%, last quarter to 5.3% and clearly you need to revive animal spirits if you are going to get it back up to 8 and 9% level. But in reviving animal spirits how important is it to push for stalled reforms?

Montek Singh Ahluwalia: I think when you say animal spirit what you really mean is the pace of the investment must become high. It is true that last year investment went down. Now, in order to bring the investment up lots of things have to happen. One of them is bending reforms. A lot of it has to do with better implication of exciting projects which have got stuck and are in the pipeline, some of which has to do with the tax related changes that the prime minister talked about. I think the investors need to be reassured that the government is keen to promote investment, keen to attract investment and keen to support the domestic investors, and I think all of these needs to be done.

Karan Thapar: Now you mentioned three or four things over there, let's take them one-by-one. To begin with pending reforms, there are some reforms that the government can push through on their own by executive decision. I am talking about FDI in retail, FDI in aviation, it's being talked about, will it actually happen?

Montek Singh Ahluwalia: I think there are things that have to done, certainly FDI in retail, in my view, should be done, FDI in civil aviation should be done. But everything that needs to be done is not a reform. A lot of it is just implementation, bottlenecks being removed.

Karan Thapar: Let's not call it a reform but these are two changes you are saying that should be done?

Montek Singh Ahluwalia: In my view that's correct and let me not say just in my view, the government has said that they are going to do it, we just have to implement it, that's it.