Manmohan Singh takes over Finance Ministry; wants to “restart growth story”

Reuters: Prime Minister Manmohan Singh summoned officials on Wednesday to formulate an economic revival plan in part addressing problems in tax policy and said he also wanted to revive the “animal spirit” of Indian economic growth.

Seeking to overcome pessimism about Asia’s third-largest economy, Singh, in remarks released by his office, stressed that improving investor sentiment was a top priority.

A slowdown in the insurance industry must also be addressed and, in a rallying call to assembled officials, he called on them to “revive the animal spirit in the country’s economy”.

Singh takes the helm of the finance ministry at a time when economic growth has dipped to its slowest pace in nine years, the rupee has hit all-time lows against the dollar, the government is grappling with bloated fiscal and current account deficits and inflation remains stubbornly high.

“I’m glad he’s talking about specifics rather than broad-brush issues,” said Abheek Barua, Chief Economist at HDFC Bank in New Delhi. “It’s a move forward from what was happening earlier.”

Despite being hailed as the architect of landmark economic reforms in 1991, Singh struggled to put his stamp on the economy after becoming prime minister in 2004.

Business leaders and economists have harshly criticised his government’s management of the economy, accusing it of complacency in the face of the economic slowdown.

Finance Minister Pranab Mukherjee stepped down on Tuesday to run for president, allowing Singh to step in.

“The growth rate has taken a dip; the industrial performance is not satisfactory; things are not rosy on the investment front; inflation continues to be a problem,” he told officials at the meeting in his office.