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Gujarat violence will not have long-term impact: Sinha

Shanghai May 12. Though the Gujarat violence will have a ``marginal impact'' on the Indian economy and no effect at all on the inflow of the Foreign Direct Investment, the Finance Minister, Yashwant Sinha, said the growth rate for 2002-03 fiscal would be over six per cent.

``There will be a marginal impact because of the disturbances. But I don't think that there is any reason to think that it is going to have any long-term impact on the Indian economy,'' Mr. Sinha told PTI.

Asked about the economic situation, he said 2002-03 would be better than 2001-2002 and various national and international agencies had predicted various growth rates which were between 6 and 6.5 per cent.

``India will continue to be one of the fastest-growing economies in the world in 2002-03,'' he said.

Asked whether the Gujarat incidents would send wrong signals to foreign investors, Mr. Sinha emphasised that it would not affect the FDI flow.

``I have very firmly said that Gujarat is not going to have any impact on FDI flows because fortunately the Gujarat violence has not been allowed to spread,'' Mr. Sinha, who was here for the 35th annual meeting of the Asian Development Bank, said.

He also noted that the kind of incidents which are taking place in Ahmedabad are ``sporadic in nature'' and also the economic activities were ``picking up''.

Asked about the reform plans, Mr. Sinha said these were moving in the right direction and there was no attempt to reverse them. ``As far as the reform programme was concerned, I would like to say that none of the steps that I have announced in the budget as well as economic reform programmes concerned had been reversed.''

Mr. Sinha said the Government's taxation reforms had not been reversed and interest rate reforms had not been diluted. However, he acknowledged that a part of the subsidy on LPG had to be rolled back a little but the Government managed to hold on to announced reductions in subsidies on kerosene as well as on fertilizers.

The Finance Minister said bank advances for non-food items had gone up, services sectors had registered increased revenues, tax collection had been better in April than last year and key sector like cement and steel were doing much better.

Call for Indo-China cooperation

India has called for cooperation between New Delhi and Beijing in transforming the zones of tension in Asia to ones of peace and prosperity so that the people can lead a better life.

``We have to ensure that the areas of conflict in Asia are converted to zones of peace. We have the responsibility to ensure that peaceful conditions prevail in the rest of the world,'' Mr. Sinha said at a reception hosted by the Federation of Indian Chambers of Commerce and Industry (FICCI) here on Saturday night. — PTI

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