Frankly, we are not encouraged by recent signs. We see no coming signs that there is going to be a reinvigorated effort to reduce the fiscal balance, IIF managing director Charles Dallara said in a markedly blunt reply to questions at a press briefing to release the institute's forecast of capital flows to emerging economies here on Thursday. Dallara said progress in reducing the fiscal deficit had stalled since last year, hurting industry's access to financing.
There needs to be a reinvigorated approach for structural policy change and privatisation, which does not seem to have captured much support in India, he said. A lot now depends on the policy and willingness of the government to get out of the way of private sector and let it continue to flourish. Washington-based IIF is the thinktank for leading commercial banks, investment banks and mutual funds and provides analysis of economic trends worldwide. In particular, IIF keeps track of the balance of payments position.
Dallara said the loss of momentum in India was despite the presence of a strong economic team in the present government.
