Washington: Acknowledging that economic reforms in India have slowed down and may remain that way till the next general elections in 2014, India`s Chief Economic Advisor Kaushik Basu said they will gather pace thereafter, and from 2015 India will be among the world`s fastest-growing economies.
Relatively less important bills might go through Parliament but major economic reforms would hit the roadblock, Basu said, adding that they are unlikely to happen before the next Parliamentary elections.
At the same time, he said there are some reforms that need to go into fast gear and identified the opening up of the retail sector as one key reform in waiting. India, he said, also needs to address the issue of massive subsidy leakage and of poor infrastructure.
After the elections, the government of the day would take reforms on fast track and there would be a flurry of reforms, Basu said, addressing a meeting at the Carnegie Endowment for International Peace, an eminent Washington-based think tank.
In Washington to attend the Annual Spring meeting of the International Monetary Fund (IMF) and the World Bank, Basu was addressing the concerns expressed by the US corporate on some recent decisions of the Indian government and its reluctance to initiate the series of next phase of reforms. He is accompanying Finance Minister Pranab Mukherjee to the IMF, World Bank meet.
Post 2014, Basu said, "you would see a rush of important reforms" and after 2015 India would be one of the "fastest growing economy of the world". The new government, if in majority, would start with the reforms in a big way because there is a sense that it needs to pick up, he added. Basu said there is a slowdown in decision-making.
The unearthing of a series of corruption and scams, he argued, is having its own impact on the psyche of the bureaucracy, who are not willing to take risks. Reforms, he said, have also slowed down because of the coalition government. Another reason for the slowdown is the battle against inflation and the drop in agricultural production.
India, he said, acted on both the fiscal and monetary policy. Finally, India too is impacted by the global economic slowdown. "We are going through a difficult year," Basu said, adding that India is trying to go back to fiscal consolidation.