World Economy

India Urges Reforms to Boost Economy

India Urges Reforms to Boost EconomyIndia Urges Reforms to Boost Economy

India’s finance minister urged opposition parties to cooperate in passage of economic reform legislation, warning otherwise Asia’s third-largest economy “will miss the bus” again.

The parliament has been stalled yet again by political rows that have hindered efforts by the new right-wing government to enact reforms and revive the stuttering economy, AFP reported Sunday.

Stormy scenes in parliament under the previous left-leaning Congress government also hindered economic reform efforts.

“The clear choice before us is – either we reform or we miss the bus once again,” Finance Minister Arun Jaitley told a top-level corporate audience in a speech in New Delhi.

The minister added there was a need for “a shared national vision” to get India back to nine-to-10 percent annual growth levels it enjoyed until a few years ago to lift hundreds of millions out of poverty.

India has been stuck in the longest spell of below-five-percent growth in a quarter-century, hit by high interest rates, an investment slowdown and flagging consumer confidence.

Economic growth in the last financial year to March 2014 was 4.7 percent after falling to 4.5 percent the previous year.

This year, the government hopes growth will accelerate to 5.5 percent and next year “we have to first cross the six-percent-mark”, Jaitley said.

Growth downturns and uncertain investment landscapes in other parts of the world mean “investors are looking to come to India”, Jaitley said.

But to capture this investment opportunity, India needs to slash red tape, liberalize the economy, speed decision-making and become a more business-friendly destination, analysts say.

“For the next decade we can have a full reform agenda on our table” if all sides get on board, Jaitley said.

The minister’s comments came a day after the government introduced in parliament tax changes which analysts hailed as a “game changer” that will cut the cost of doing business domestically and boost growth.

The government tabled the long-awaited goods-and-services tax (GST) harmonizing varying state levies to create a single internal market.

The legislation will be debated in the next session of parliament and the government aims to implement the new tax in April 2016.