The Voice
of the Free Indian
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India's economy remains robust-
BBC
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BBC:- Tuesday, 3 December, 2002, 11:23 GMT
India's economy remains robust
India's economy is strong enough to ride out a storm
A gloomy global outlook, tensions with Pakistan and bad weather
at home are unlikely to dent Indian growth, Finance Minister Jaswant
Singh has said.
Mr Singh has retained his 5.0-5.5% growth forecast for the year
to March 2003, but warned that the Indian economy faced a range
of "imponderables".
Chief among these was the impact of a war on Iraq, especially
in light of India's dependence on imported oil.
The forecast was contained in the finance ministry's mid-year
review, an innovation intended to shed more light on economic
policy making and to prepare for next year's Budget.
'Intrinsic strength'
The mid-year report adopted a broadly positive tone.
Jaswant Singh
Mr Singh is keen on greater transparency
"The Indian economy... has once again demonstrated its intrinsic
strength, despite the drag of the most telling monsoon deficiency
in two decades, a subdued world economic outlook accompanied by
sluggish global trade, and unsettling geo-political conditions,"
it said.
But it warned that there was much that India could do to improve
its situation.
First, interest rate policy should be revised in order to encourage
saving and help reconstruct the ramshackle pension industry.
Second, it urged the government to pour more effort into attracting
foreign investment, an area where India has long lagged other
large economies.
Good practice
The real importance of the report, analysts argued, was its very
existence.
The Indian government has tended to be somewhat secretive about
economic policy, and public knowledge of and interest in it is
limited.
"There is no surprise element as almost everything is known,"
said Saumitra Chaudhuri, economic adviser with Indian credit rating
agency ICRA.
But he argued that publishing regular bulletins was good practice.
"It will help in policy planning and is good politics as
well."
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