US media now hails Manmohan Singh's reform push

The US media has hailed the Congress-led United Progressive Alliance government’s decision to open up the civil aviation and multi-brand retail sectors for foreign capital as it came just weeks before American Treasury Secretary Timothy Geithner’s visit to India.

New Delhi’s reform rush is likely to send positive vibes to Washington before Geithner and his Indian counterpart P Chidambaram co-chair the third bilateral dialogue on economic and financial partnership.

“The Washington Post” termed the government’s decision to allow 51 per cent FDI in multi-brand retail and 49 per cent in airlines as the “biggest and arguably toughest economic reforms since Prime Minister Manmohan Singh took over in 2004.”

The US daily had recently sparked off a controversy after it described Singh as “a dithering, ineffectual bureaucrat presiding over a deeply corrupt” regime in an article headlined “India’s ‘silent’ prime minister becomes a tragic figure”.

The government as well as the ruling Congress had denounced the article which was written by the newspaper’s New Delhi correspondent Simon Denyer.

But as Singh this week sought to shrug off the “policy paralysis” his government was accused of and unleashed a blitz of reforms, “The Washington Post” reported on Friday: “After being on the defensive for two years over slowing economic growth, high inflation and growing corruption scandals, India’s coalition government finally appeared determined to make tough decisions this week.”

“The New York Times” said Singh’s government was “under heavy pressure to kick-start India’s slowing economy, boost employment and improve the country’s shambolic infrastructure” and allowing major foreign brands was a step in that direction.

The “Time” magazine, too, had on a cover story in its July 16 issue described Singh as an “underachiever” and noted that he appeared to be “unwilling to stick his neck out” on reforms that would put the country back on growth path.

With several US-based multi-national companies seeking to enter the retail and aviation sectors of India, the UPA government’s dithering on opening up the doors to foreign investment emerged as an irritant in New Delhi’s ties with Washington.

Even US President Barack Obama in an interview to PTI last July pointed out that American business community found it “too hard” to invest in India due to prohibitions and restrictions on foreign investment in “too many sectors”.

The other factors that triggered speculation about a drift in bilateral ties are the US companies’ concerns over India’s Civil Liability for Nuclear Damage Bill, which has been a roadblock in implementation of the landmark nuke deal between the two countries, and New Delhi’s decision to drop two American contenders from the fray for the $10.4 billion contract to provide 126 Medium Multi-Role Combat Aircrafts for the Indian Air Force.

Geithner is the first high-profile US official visiting New Delhi after the change of guard in the North Block with P Chidambaram taking over as the finance minister following Pranab Mukherjee’s election as President.