Guest guest Posted November 7, 2003 Report Share Posted November 7, 2003 >Vajpayee defends Indian democracy >By Edward Luce and John Ridding >The Financial Times >November 6, 2003 > >The speed of India's 12-year-old economic reform process has often been >compared unfavourably to that of neighbouring China. But Atal Behari >Vajpayee, India's 78-year-old prime minister, vehemently rejects any >suggestion either that it has been too slow, or that India's democracy >should be blamed for its slowness. > >Speaking to the Financial Times at his heavily guarded official >residence at Race Course Road in New Delhi, Mr Vajpayee said India had >much to learn from China. But China's system of politics was clearly not >part of it. > >"I visited China recently [in June] and was very much impressed by its >many economic achievements," he said. "But I do not think anyone who has >closely followed the Indian economy over the last decade can say that >our economic reform programme has lacked urgency." > >Mr Vajpayee, who faces a series of important state elections on December >1 that are seen as a dress rehearsal for national elections in 2004, >pointed out that India's average annual growth rate has exceeded 6 per >cent since 1991. > >Many in India believe that the next wave of reforms, including the >government's all-but-stalled privatisation programme, has been held up >because of the impending polls. Mr Vajpayee, whose Hindu nationalist >BJP-led coalition contains 24 parties, the most diverse government in >the world, said that reforms carried out in a democracy are more deeply >rooted and sustainable. > >"We cannot accuse democracy of impeding reforms," said Mr Vajpayee. "I >also do not accept that our reform process has been 'stop-go' in nature. >It is natural - and beneficial for the durability of reforms - that the >process should move forward on the basis of broad consultations and >reconciliation. > >"I would go one step further and say that our new experience of >successful coalition governments has been ideal [in] balancing divergent >views and accommodating regional and sectoral interests more >effectively." > >Owing partly to healthy monsoon rains, growth in India's gross domestic >product this year is expected to hit 7 per cent or more - up from just >4.4 per cent last year. Agriculture accounts for almost a quarter of the >economy. > >Institutions such as the World Bank have criticised India for an >apparent lack of urgency in upgrading the country's rural infrastructure >in order to lessen the economy's dependence on the vagaries of the >weather. More than 60 per cent of India's 1.05bn people rely on farming >for their livelihoods. > >But Mr Vajpayee, whose "golden quadrilateral" programme will link >India's four main cities with four-lane highways by the end of next >year, said that such criticism was outdated. > >"We are focusing strongly on infrastructure development in rural areas, >including improved power availability and upgraded irrigation >facilities, so that the correlation between our economic growth and the >monsoon can be reduced further," he said. > >Mr Vajpayee - who is now India's longest serving prime minister not to >be from the opposition Congress's Nehru-Gandhi dynasty - also >highlighted India's "ambitious" (but controversial) plans to link >India's main rivers in a national network of canals and basins. >In addition, he dismissed the suggestion that foreign direct investment >to India would remain far lower than that of neighbouring China. India >attracts roughly a tenth of the FDI flows of its neighbour partly >because of perceptions that it has a cumbersome and corrupt bureaucracy >that often fails to honour its obligations. > >But Mr Vajpayee said that FDI to India, which accounts for 1.7 per cent >of GDP, was "constantly" being liberalised. Ceilings on foreign >investment in protected sectors were also being increased quite rapidly. >And the coalition government was finalising legislation that would >permit the creation of special economic zones that would be free of some >of the restrictive tax and labour requirements that apply to the rest of >the country. > >If enacted, this would broadly track the China experience, where the >creation of such zones in the early 1980s helped propel the country's >export boom. > >"We see the SEZ not only as stimulating greater investment inflows but >also as policy laboratories," said Mr Vajpayee. "Their success in >attracting investment, and the profitability of this investment, will >strengthen confidence in our reform process, both within India and >outside." > >Mr Vajpayee, who has said he will lead the BJP into the next election >"and beyond", also emphasised that India's economic reform process was >irreversible. And he highlighted India's improving economic >fundamentals. India's foreign exchange reserves had recently exceeded >$90bn - more than 1 year's worth of imports. > >The "policy framework" for India's financial sector had been sharply >improved in the past five years, he said. "Transparency, speed, >efficiency and accountability have been introduced, comparable with >world standards, in our debt and equity markets. Our financial >institutions are healthy [india's banking sector has a far lower >proportion of non-performing loans than that of China]." > >He added that the policy regime for both power and telecommunications >had also been strengthened. For example India is now adding more than 1m >new mobile phone users every month - almost a fifth of world growth in >cellular telephony. > >"I could go on and on," he said. "The short point is that there is no >weakening in India's commitment to the reform process. [but] those who >make critical comments about the pace of our reforms should remember >that this vast country accommodates a diversity of perspectives. > >"We have sought to implement our economic liberalisation with public >accountability and a social conscience. This makes our reforms more >enduring and stable. Our approach is vindicated by the fact that among >the countries which liberalised their economies in the early 1990s, >India alone moved to a higher growth trajectory without an interim >period of recession." > > > _______________ >From Beethoven to the Rolling Stones, your favorite music is always playing on MSN Radio Plus. No ads, no talk. Trial month FREE! http://join.msn.com/?page=offers/premiumradio Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.