Reforms, IT augurs well for India's growth prospects: survey

Wednesday, 03 December 2003, 20:30 IST
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WASHINGTON: India may see higher growth rates in the years ahead if Asia's third largest economy accelerates the pace of reforms across all sectors and achieves sustained growth in the money spinning IT sector, said a survey Tuesday. "The truth is that despite numerous hiccups, India's reforms have continued and are likely to continue further," said survey published by the International Monetary Fund (IMF). "This, together with the likely continuing expansion of the country's dynamic information technology sector, augurs well for India's long-term growth prospects," the report added. In its mid-year economic review, the Indian government says the economy in the current fiscal year would register a growth of over seven percent on increased agriculture production and industrial activity. Indian economy grew by a moderate 4.3 percent in the year ended March 31, 2003, mainly due to a 3.1 percent fall in agriculture produce, as the worst drought in three decades ravaged large parts of the country. The survey said the "more systematic and systemic reforms" of the 1990s in India had produced decided more stable and sustainable growth from 1992 onwards. "True, the pace of India's reforms has been slower than what even many pro-reform economists advocate but this is to be attributed not so much to conscious choice as to the intricate demands of the country's democratic political process," it said. According to the report, economic growth during the 1990s in India was more robust and far less volatile as major reforms were put in place after the country experienced an economic crisis in June 1991. "The annual growth rate quickly picked up and reached 5.1 percent in 1992-93 and never fell below 4.3 percent subsequently. "And, whereas the growth spurt of the 1980s culminated in a crisis, growth in the 1990s was sustained, with no hint of crisis concerns in the minds of India watchers." The survey said the fragile but higher growth in the 1980s provided firsthand evidence to policymakers that gradual liberalisation could deliver faster growth without causing disruptions. "It was a lesson that emboldened reformers to move forward with the major steps taken in the July 1991 budget," it said. "And it was these more sweeping measures that translated into the more robust and sustainable growth that India has enjoyed since 1992."
Source: IANS
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