Karnataka - Shimoga   

Fundamentals of Indian economy better now: expert

By Our Special Correspondent

SHIMOGA, APRIL 25. Mahendra S. Kanthi, professor of International Economics and BJP ideologue, has said that the fundamentals of Indian economy are better now as a result of the large foreign exchange reserves, extensive modern communication systems, and a good network of inter-State highways.

Responding to the criticism by the former Union Finance Minister, Manmohan Singh, and the economic adviser of the Congress, Jairam Ramesh, on the management of economy by the National Democratic Alliance (NDA) Government, Prof. Kanthi told presspersons here that apart from the breakthroughs achieved on the economic front, there were other issues such as peace initiatives and dialogues with Pakistan, the increasing trade with China, and investments of human capital which had enhanced the country's prestige in the international arena.

He said these would not have been possible but for the leadership of the Prime Minister, A.B. Vajpayee. He referred to seven major problems listed by the Prime Minister, including education, shelter, water scarcity, power, roads, infrastructure and employment, and said with his vision and experience Mr. Vajpayee sought advice from experts and formed committees to formulate strategies for increasing connectivity and linking rural roads with main roads.

Prof. Kanthi did not agree with Mr. Manmohan Singh's observation that the inflow of foreign exchange in a big way would be disastrous for the country, and pointed out that the countries which had big baskets of "hard currencies'' could exert considerable leverage in the foreign commodity, capital, and investment markets.

He said India's comfortable foreign exchange reserves had enhanced the confidence of investors.

Referring to the challenge posed by Mr. Manmohan Singh over the claim of the achievement of eight per cent Gross Domestic Product (GDP), Prof. Kanthi said that it would be confirmed if the factual data and analysis were examined.

He did not agree with the observations of Mr. Jairam Ramesh that the savings sector had been hard hit and the rate of returns in savings was negative as the rate of inflation was higher than the rate of interest.

He termed it a misrepresentation of data and economic analysis.

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