Prime Minister Manmohan Singh’s Chief Economic Advisor Kaushik Basu stunned the government by admitting to policy paralysis,he confessed that major economic reforms are unlikely to happen in India before the next parliamentary elections in 2014.
Addressing a meeting at the Carnegie Endowment for International Peace on Thursday (April 19), an eminent Washington-based think tank, Basu said that relatively less important bills might go through Parliament. Post-2014, he said, “you would see a rush of important reforms” and after 2015 India would be one of the “fastest growing” economies 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, Basu added. 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 reforms in waiting. India, he said, also needs to address the issue of massive subsidy leakage and that of poor infrastructure. Kaushik Basu has also said that reforms have slowed down because of the coalition government. He also said the unearthing of corruption and scams have their impact on the psyche of the bureaucracy and that the bureaucracy was not willing to take risks.