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Our economic reform has a human face: PM

By Amit Baruah

COPENHAGEN (Denmark) Oct. 9. The Prime Minister, Atal Behari Vajpayee, today said that a democratically-elected government could not adopt a "shock therapy approach" to economic reform and had to be sensitive to the "vast disparities in incomes and living conditions".

Addressing the Third India-European Union Business Summit soon after his arrival in Copenhagen from Cyprus this afternoon, Mr. Vajpayee said India had to be guided by the principles of public accountability and a social conscience in its approach to economic reforms. ``To borrow a metaphor from an earlier era and a different political context, what we are trying to implement is economic liberalisation with a human face,'' the Prime Minister told the business gathering.

India, an attractive market

Responding to critical comments on the pace of the reforms, the Prime Minister asked business leaders to remember that the same "sub-continental size and population, which makes India an attractive market, also accommodates a diversity of perspectives, interests and needs". Of the countries which liberalised their economies in the early 1990s, India alone moved to a higher growth trajectory without an interim period of recession.

Mr. Vajpayee hoped that the European Union would address the "development deficit" by dismantling high agricultural subsidies, which harmed the prospects of developing countries. "We have a serious problem with non-tariff barriers against developing country products on ostensible environmental or social concerns."

`No mean achievement'

Mr. Vajpayee stated that India's growth rate of six per cent was no "mean achievement" in the uncertain post-September 11 environment. "It has been achieved also in the face of a relentless and sustained terrorism in parts of our country — masterminded from across the borders and designed to create political turbulence, economic disruption and social disharmony," the Prime Minister, who did not name Pakistan, said.

It had become the fashion to liken economies to real and mythical creatures like elephants, tigers and dragons. "The Indian economy is often identified with the elephant. I have no problem with this analogy. Elephants may take time to get all parts of their vast bodies moving forward in unison. But once they actually start moving, the momentum is very difficult to divert, slow down, stop or reverse. And when they move, the forest shakes,'' he said.

There were "some shortcomings" which disappointed India's overseas business partners. "We are building a national consensus on labour reforms, heeding the needs of both business and labour. High-priority infrastructure projects are being given special attention. We know that foreign investors are often vexed by an excess of procedure, paperwork and bureaucracy... We are trying to tackle it with a national programme involving e-governance.''

India was enacting a new intellectual property rights regime in the country affording protection to the foreign technology exporter, fully in line with WTO commitments. Europe had taken an epoch-making step by adopting a single currency. "It (the European Union) soon goes in for enlargement. We hope these steps will act as a stimulus for Europe's economic growth. We also hope that the consequent spurt in intra-Europe economic activity will synergise opportunities for its non-European partners.''

On the global economy, Mr. Vajpayee said it was facing a prolonged slowdown. "This is not merely because of the cyclical nature of business. Its roots run deeper into the structural imbalances of the global economy. It is widely accepted that the most reliable stimulus for sustainable growth of the developed economies is their constructive engagement with the developing countries. This economic engagement has to be consistent with the preservation of their environmental resources, social values and cultural identities.'' Mr. Vajpayee said a basic symmetry in the circumstances and core values underpinned the Indo-E.U. partnership. "We are both global actors in a multi-polar world. We are large multi-cultural and multi-lingual federal entities with strong regional identities. We value democracy...''

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