NEW DELHI: World Bank chief economist Kaushik Basu on Friday urged India to keep up its blitz of “promising” reforms, saying they can help the economy return to the nine per cent growth needed to combat poverty.
The World Bank expects growth of Asia's third-largest economy to be 5.5 per cent this calendar year, inching up to just short of six per cent next year and reaching close to seven per cent the following year, Basu said.
If the country stays on its “promising” reform path, he added, “it has enough fundamental strength there is no reason why India can't get back to the eight to nine per cent growth” which it enjoyed in the second half of the last decade.
“If we can continue to push on reforms we can make a big difference to India,” Basu, previously chief economic adviser to the Indian prime minister, told an economic forum in New Delhi.
Basu's remarks came as Finance Minister P. Chidambaram promised more steps to spur the economy, which has slowed sharply due to high interest rates and the global downturn, on top of a spurt of reform measures recently announced.
Late Thursday, the cabinet cleared changes to a century-old land acquisition law and established a panel to be headed by Premier Manmohan Singh to fast-track projects to overhaul India's dilapidated ports, roads and other infrastructure.
The draft land purchase law – which must now be approved by parliament – seeks to give farmers higher prices for their land and states that companies buying property must win assent from 80 per cent of landholders.
In public-private projects, 70 per cent must approve the sale.
Compulsory land seizures in the past have sparked bitter clashes between farmers and state authorities and huge project delays as India industrialises in its quest to create more jobs for its youthful 1.2-billion population.
The new steps come after the government won a parliamentary vote last week approving its decision to let in foreign supermarkets – a key plank of its renewed economic reform agenda.
Singh's scandal-tainted government has initiated a string of reforms that aim to open up sectors such as retail, insurance and aviation to foreign investors as it seeks to kickstart growth before it is slated to face voters in 2014.