Reforms Have Moved Beyond Politics

Indias latest budget was proof that the countrys reform programme had moved beyond the political arena, revenue secretary N K Singh said yesterday.

The budget is a watershed because it represents a depoliticisation of the agenda for reforms, Singh told an audience of businessmen and academics in Singapore.

Nobody would have believed that a 13-member coalition government of mostly regional parties could, together, take such bold steps to further the reform process, he said. He said Prime Minister H D Deve Gowdas coalition had succeeded a 13-day Hindu nationalist government, whose finance minister had wanted to outdo the dramatic reforms unleashed in 1991 by the previous Congress party government.

Finance minister P Chidambarams budget had been hailed by newspapers and any complaints about reform from other parties were just about pace and timing, Singh said.

The budget, presented at the end of February, slashed personal and corporate taxes as well as bringing in other encouragements to investors.

The budget represents a mindset change that is of a durable nature, Singh said. India is now in a position to take on other emerging markets as a profitable place to invest, he said. India means business and is open for business.

However, a research report by Union Bank of Switzerland issued in Singapore advised caution.

The budget removes many doubts about the countrys commitment to economic reform and marks another step away from Indias legacy of over-regulation and high taxation, it said.

Still, we would caution against excessive enthusiasm. The shadow of the influential Leftist parties in the coalition government can be discerned by a careful reading between the lines and further reforms are necessary if India is to sustain high growth rates, it added.

Singh said the Indian economy had grown at seven percent for the past three years and would do so again.

India is poised for stable, long-term growth, he said.