Prime Minister Manmohan Singh on Friday said the government will now have to undertake more difficult reforms, including reduction of subsidy and implementing GST, to put economy back on the path of stable, sustainable growth.
"The easy reforms of the past have been done. We have the more difficult reforms to do such as the reduction of subsidy, the insurance and pension sector reform, eliminating bureaucratic red tape and implementing Goods and Services Tax (GST)," Singh said while addressing Parliament.
Reaching out to opposition and asking them to forge consensus on these difficult reforms, he said: "these (difficult reforms) are not low hanging fruits and they need active political consensus...
"I urge political parties to move towards the same and join in the government's effort to put economy back on the path of stable, sustainable growth."
The UPA government has been pursuing the principal opposition party BJP to get through the hike in foreign direct investment (FDI) in the insurance sector, since 2008.
In the insurance sector, the government proposes to increase the FDI cap to 49 per cent from 26 per cent, which the BJP opposes. The main opposition party is also not in favour of raising the FDI limit in the pension sector to 49 per cent.
The Centre has been engaged with states to bring them on board for introduction of new indirect tax regime, GST. The Constitutional Amendment Bill was introduced in Parliament in 2010.
In order to reduce subsidy outgo, the government has taken several initiatives, including partially deregulating diesel prices, allowing Oil companies to fix petrol prices and also capping domestic subsidised LPG cylinder at 9 per family a year.
Besides, to attract foreign funds, it has also hiked FDI limits in various sectors including retail, aviation, telecom, power exchanges, petroleum and natural gas sectors.