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The Chief Economic Adviser to the Finance Ministry, Dr Kaushik Basu, on Tuesday said coalition politics is holding back reforms in the country especially in the areas of FDI in retail and decontrol of diesel price.
Delivering the Dr V.K.R.V. Rao Memorial Lecture, Dr Basu said to boost the morale of investors , India needs immediate reforms in these sectors.
“I would stress it would benefit farmers in a large way. This would allow small farmers and small producers to get hooked on to the global supply chain. The way China and Indonesia have done,” he added.
“Some part of the political group does not seem to understand. But there is political consensus among top political leaders but coalition politics is holding back reforms,” he added.
Diesel decontrol
“It cannot be done right now. But small steps are needed. Intelligent decontrol mechanisms are urgently required at the moment,” Dr Basu said.
He pointed out that the country's growth rate is disheartening and it is time the Government wakes up to the reality. However, among the BRIC countries, growth rate for India is still positive.
“Brazil's growth rate is 0.7 per cent; South Africa 2 per cent; Russia 4.9 per cent and China, 8.1 per cent. India has 5.3 per cent.” As expected, we are behind China but ahead of others, he added.
Referring to G20 nations, Dr Basu said: “India's ranking remains unchanged and outlook remains positive. In economists' forecast amongst 41 countries, India is ranked number two, behind China.”
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