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 “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.
