Monday, Nov 24, 2003
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By Our Special Correspondent
He was delivering the inaugural address at the India Economic Summit jointly organised by the World Economic Forum and the Confederation of Indian Industry.
Underlining the need for policy changes, as growth was impossible without reforms, he said the economy was approaching a "point of criticality". "I cannot predict when it will happen. But it will do so very soon. And when that happens, growth will be explosive."
The economic policies followed till the 1980s inhibited, punished and looked down growth, Mr. Singh said adding that the Government's basic economic philosophy was to enable everybody create wealth. In line with this thought, the Government had taken up reforms to "release creativity and reawaken India to the reality of its growth potential".
Explaining the limitations in expediting the reforms process, he said: "Frequently people approach the courts and I also have to carry Parliament with me. But we will very shortly address the incomplete business of reforms." The areas where the Government will undertake structural changes include insurance and banking, disinvestment of public sector undertakings and attracting investment in roads, ports and airports. All the measures were aimed at improving the quality of life in urban and rural areas.
Observing the need to usher a second green revolution, he regretted that the agro industry was rarely at the forefront of the discourse on broader economic issues. The Government was pursuing a multi-dimensional policy that placed equal emphasis on all sectors of the economy, including service and manufacturing. Growth cannot take place by relying on the service sector alone, manufacturing will also continue to receive attention since industries the world over were choosing markets with educated and trained manpower. India was ideally placed to become a global manufacturing base for several sectors such as pharmaceuticals and biotechnology as well as an R & D hub for high-end research.
While fiscal deficit remained an area of concern, the Finance Ministry's move to arrest its increase was satisfactory. Inflation was at a "benign" four per cent, but "there will be some correction between now and February. I am not happy with the current inflation rate of four per cent," Mr. Singh said.
He lauded the Reserve Bank for ably managing interest rates and the industry's demand for lower interest rates to compete globally.
Mr. Singh virtually rejected the exporters' demand to check the hardening of the rupee by pointing out that its appreciation was only against the dollar and not other currencies. He advised them to switch to the Euro.
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