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Economic situation in India's favour: Jalan

Our Bureau

KOLKATA, Nov. 3

THE economic situation has changed fundamentally and is now in India's favour, the RBI Governor, Dr Bimal Jalan, told a gathering of industrialists and captains of industry here today.

Taking a long-term view of the Indian economy, Dr Jalan touched on both "worst of times" and "best of times", between 1958 and 1991, participating in an interactive session organised by the Indian Chamber of Commerce.

Now is the time to concentrate on the "big picture" and draw inspiration from "our comparative advantage", the RBI chief said. Things were definitely now in our favour, having gone through a series of crises in the past, and with the right kind of factor endowments, we should be in a position to make full use of our ability to change for development, he pointed out.

"India has a far greater capacity to change than what many would like to believe, and it is not so much the macro-economic policies but the ground realities that will ultimately matter."

Admitting that many public institutions were in bad shape, Dr Jalan said there were still many issues that we have to grapple with, given our levels of tolerance to inefficiency.

Pointing out that the world would be unrecognisable in the next 15 years, he said the chambers of commerce collectively had a definite role to play in ushering in fundamental changes for all-round betterment.

Asked to compare the state of our economy with that of China, Dr Jalan said a fundamental difference was that in China things happen quickly whereas in India, "we have this habit of looking backwards and sideways all the time, and in the process, get not hing done".

Reaffirming the chamber's viewpoint on "increasing competitiveness", Mr A.V. Lodha, President of ICC, said: "We firmly believe that India must have its own strong national institutions in the banking and finance sector, which would not only be able to ta ke the large exposures required in our infrastructure building phase, but also insulate us from global volatilities...''

He suggested that "we must continue to encourage and support our institutions, force consolidation in this sector to create higher operational efficiencies and depth, and perhaps significantly increase their capitalisation".

Pic.: INTERFACE: The RBI Governor, Dr Bimal Jalan (right) with the Indian Chamber of Commerce President, during an interaction in Kolkata on Saturday.

Picture by G.R.N. Somashekar