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Saarc international I Thursday 19 April 2012
WEEKLY REVIEW OF INDIA NEWS
Economy facing challenges but we’ll overcome them: Manmohan
While admitting that the Indian economy has been facing “difficulties,” Prime Minister Manmohan Singh on Saturday expressed confidence that his government would overcome the challenges with “great determination.” Speaking at the conclusion of a panel discussion here on ‘Challenges of economic reforms in India,’ in which he was the chief guest, Dr. Singh said: “There are difficulties. Life will not be worth living if there are no difficulties. I am confident, with great determination, we will overcome.” The panel discussion was organised by the Indian Council for Research on International Economic Relations (ICRIER) to mark the update and presentation
of a copy of published essays by leading economists on economic reforms and developments. The book was presented to the Prime Minister by ICRIER Chairperson Isher Judge Ahluwalia. During the discussions by the panel, which included Reserve Bank Governor D. Subbarao, Chicago University Professor Raghuraman G. Rajan and Business Standard Chairman T.N. Ninan, the urgent need for second generation reforms was highlighted even as attention was drawn to the maladies afflicting the economy. Professor Rajan pitched for putting in place second generation reforms along with a hike in fuel prices in keeping with international rates, resolution of various bottlenecks and a
India, Pakistan to fasttrack talks for trade in petro products, electricity Seeking to speed up bilateral cooperation and enhance economic engagement, India and Pakistan have decided to fast-track the ongoing talks for trade in petroleum products and electricity.
The issue of opening bank branches in each other’s country would also be taken up on priority. It was decided during the bilateral meeting between Commerce Minister Anand Sharma and the visiting Pakistan Trade Minister, Makhdom Amin Fahim, that the officials of both countries should fast-track the ongoing process. It was also noted that the Central banks of both countries were examining issues relating to opening bank branches in each other’s country. SAFTA lists During the discussions, both sides agreed to draw a road map for further reductions in the South Asian Free Trade Area (SAFTA)
sensitive lists. While reducing the SAFTA lists, both sides would appropriately consider requests received for tariff lines to be removed. Both sides welcomed these rapid developments on the business front and the business-tobusiness and business-to-consumer contact for promoting both commerce and people-to-people understanding. The Ministers agreed that this was a clear testimony of the business-driven demand for a rapidly expanding bilateral economic engagement. Joint Business Council The Ministers expressed their wish that the business visa regime needed to be liberalised at the earliest. It was noted that a formal decision on this was expected at a meeting of the Home Secretary of India and the Secretary of the Ministry of Interior of Pakistan likely to he held next month. They noted that the business chambers from both sides provided great support to fast-track the growing economic engagement between the countries. It was decided that a Joint Business Council be constituted with 10 prominent business persons to be nominated by each country.
“more kindly” treatment of foreign investors with respect to the budget proposal of taxation with retrospective effect. The tax
should be levied with prospective effect as, despite a short-term negative impact, the step would be beneficial in the long term, he said. Dr. Subbarao, while expressing concern over the widening fiscal and current account deficits, asserted that the economy now (in 2012) was far more resilient than what it was in 1991. The current downturn, he noted, was a short-term phenomenon and the economy was mature enough to absorb ‘shocks’ and the country’s growth story was intact. “The structure of the economy has changed [since 1991]. Our
financial markets are more mature, more diverse and much deeper. They have the resilience to absorb shocks,” he said. In his comments on the discussions, the Prime Minister said: “They [panellists] have thrown a new light on old problems. They have mentioned many challenges our economy is facing. There are difficulties …” Dr. Singh made these observations despite the fact that he had accepted the invitation on condition that he would not speak. “I had accepted this invitation on the condition that I will not speak. I don’t wish to break that,” he said.