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Comment on reforms not linked to 2014
election: Kaushik Basu
Friday April 20, 2012 08:30:03 PM,
IANS
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New Delhi: Government's chief economic advisor Kaushik Basu Friday clarified
that his comments on economic reforms getting a push after 2014
was not linked to India's general election but to a "possible
European crisis".
"At the Carnegie lecture, the gist of my argument was that 2014
was an important year because numerous European banks would have
to begin to repay $1.3 trillion worth of loans that they had
received from the European Central Bank," Basu said in a
statement.
"Some of this was reported on poorly, juxtaposing my comments on
Europe in 2014 with the Indian election of 2014. This is
unfortunate, because the central message of my talk was the
possible European crisis of 2014 and India's major rise
thereafter, likely overtaking China," he said.
Basu was quoted as saying in a section of media that major
economic reforms were unlikely till 2014 because of the general
election.
His comment at Carnegie Endowment for International Peace, in
Washington Thursday, sparked a political storm in the country.
Basu said the opinion expressed by him at the meeting in
Washington was his personal and it should not be seen as that of
the government.
"This is one of the strengths of India that it allows us to
generate and discuss new ideas without the government having to
first endorse them," he said.
Basu argued that huge repayment of loan by European banks could
result in third round of economic crisis after 2008 and 2011.
"But soon after the possible European crisis of 2014, we could see
India as the world's fastest growing economy, faster than even
China," he said.
Finance Minister Pranab Mukherjee's top advisor admitted that
there was slowdown in economic reforms and decision-making in
recent years due to coalition politics.
"I specifically mentioned that the problem with the Goods and
Services Tax (GST) reform was that the opposition realised this is
a good reform. Therefore, it was reluctant to let it happen under
the current regime," he said.
"A single-party majority government would not face this problem.
If there is a single-party majority in the next election, that
will facilitate such reforms. I argued that some reforms, such as
FDI in multi-brand retail, were likely to happen sooner because in
principle they did not need the support of the opposition; and
this will give a boost to the mood of the economy," Basu added.
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