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New policy report says India cannot achieve growth like China without reforms


March 16, 2012 - Washington

A new policy report from Rice University's Baker Institute for Public Policy has revealed that India would find it difficult to match China in terms of economic growth without carrying out reforms.

Russell Green, author of the paper, 'Limits of the Jugaad Growth Model: No Workaround to Good Governance for India', believes after being relatively resistant by the global economic downturn, India is now experiencing a major slowdown because the economy has overshot its support structure.

"The government put reforms into place in the early '90s that made it possible for the private sector to grow. But the government itself remained in the same semi socialist mode. It had allowed these private-sector reforms but the basic political leadership and basic political process have stayed the same," Green said.

"India really has the potential to grow at a China-like double-digit pace. However, that's not going to happen until the government gets its act together," he said.

Lagging government services like education, energy systems and transportation were mentioned as the major issues faced by the Indian people and private sector in the report.

Green suggested some near-term and deeper reforms that the Indian government should consider, as Indian Finance Minister will submit the annual budget of Friday.

Some of the suggestions made in the report are providing a politically and economically credible plan to introduce greater fiscal discipline, goods and services tax reform, encouraging anti-corruption initiatives, need to cut out the middlemen mandated through the current agricultural marketing laws by the states and more focus on debt collection by introducing much-needed bankruptcy procedures outlined in the Companies Bill.

Some of the deeper reforms include the judiciary, where there is currently a 30-million case backlog, bureaucracy, labor, education and land development. More information on all of the reforms can be found here.

ANI

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