Reforms have slowed; will pick up pace only after polls, India tells US

Acknowledging that economic reforms in India have slowed down and may remain that way till the next general elections in 2014, Chief Economic Advisor Kaushik Basu said they will gather pace thereafter and from 2015 India will be among the world’s fastest growing economies.

Relatively less important bills might go through Parliament but major economic reforms would hit the road block, Basu said, adding that they are unlikely to happen before the next Parliamentary elections.

At the same time, he said there are some reforms that need to go into fast gear and identified the opening up of the retail sector as one key reform in waiting.

India, he said, also needs to address the issue of massive subsidy leakage and that of poor infrastructure. After the elections, the government of the day would take reforms on fast track and there would be a flurry of reforms, Basu said, addressing a meeting at the Carnegie Endowment for International Peace, an eminent Washington-based think tank.

In Washington to attend the Annual Spring meeting of the International Monetary Fund (IMF) and the World Bank, Basu was addressing the concerns expressed by the US corporate on some recent decisions of the Indian government and its reluctance to initiate the series of next phase of reforms. He is accompanying Finance Minister Pranab Mukherjee to the IMF, World Bank meet. Post 2014, Basu said, “you would see a rush of important reforms” and after 2015 India would be one of the “fastest growing economy of the world”.

The new government, if in majority, would start with the reforms in a big way because there is a sense that it needs to pick up, he added. Basu said there is a slowdown in decision making.