The Hindu : Reforms stand India in good stead: Chidambaram

Online edition of India's National Newspaper
Sunday, Apr 27, 2003

Southern States

Southern States - Tamil Nadu

Reforms stand India in good stead: Chidambaram

By Our Staff Reporter

Thanjavur April 26 . Reforms initiated in 1991 have helped in making the country's economy strong, P. Chidambaram, Congress Jananayaga Peravai leader, claimed today.

The reforms introduced in 1991-95 were carried forward by the United Front Government, in which he was Finance Minister between 1996 and 1997. The UF with communists and others as allies proved that it would be possible to carry on with reforms though parties had differing ideologies.

Mr. Chidambaram was speaking on the `Economic Scenario in India' at a meeting organised here jointly by all Rotary clubs of Thanjavur.

Growth was the highest in India for the second time, after independence only in 1996-97 at 7.8 per cent. That year inflation and fiscal deficit were very small.

Foreign exchange reserves, which were $1 billion in 1991, grew to $70 billion after the reforms were launched and the strict Foreign Exchange Regulation Act was done away with.

"As the economy became strong, we did not feel the impact of the 30-day war in the Gulf this year,'' compared to the 1991 conflict, during which ``we had some problems. This time the war did not have even the impact the recent lorry strike made in the country.

Describing trade as the first driving force of economy Mr. Chidambaram said exports should go up to earn more foreign exchange. He also called for more investments in agriculture, second driving force. The investment by both the Centre and the State was only Rs. 3,000 crores. India could produce half of the grain needs of the world.

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