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Gujarat won't have long-term fallout: Sinha

By Sridhar Krishnaswami

Washington April 22. The Union Finance Minister, Yashwant Sinha, has admitted that the communal violence and carnage in Gujarat has had an effect on the Indian economy, but maintained that there would not be long-term fallouts.

"What has happened in Gujarat is most unfortunate. It certainly has impinged upon the economy, and Gujarat is a very important contributor to the GDP of the country," Mr. Sinha told presspersons at the Indian embassy here.

The Finance Minister was here for the spring meetings of the World Bank and the International Monetary Fund (IMF). Before he left, Mr. Sinha met the IMF Director.

Mr. Sinha said no one had "mentioned" Gujarat or for that matter Enron. "It is my belief that the worst is behind us. What we are witnessing are sporadic incidents here and there, law and order problems which can also be seen in many parts of the country and elsewhere in the world. It is not something that will have a long-term deleterious impact on economic development or growth. Let me tell you that nobody with whom I had interaction here even mentioned the word Gujarat. I think we are more obsessed with the impact of Gujarat on foreign investment in India."

Mr. Sinha said Enron was not going to "make or mar" the future of India. "No businessman or Government official talked to me here about Enron," he said, making the point that the law would take its course in India and in the U.S.

Mr. Sinha was invited to attend a special meeting organised by the U.S. Treasury Department on the issue of terrorist financing. At this meeting of the "Extended Group of Seven", Mr. Sinha said he had pointed out that terrorist financing was taking place through normal and non-banking channels and was sustained by narcotics trade.

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