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Journalism of Courage
NEW DELHI, MAY 22: India’s economy will grow at an annual rate of around seven per cent between 2000 and 2002, but this needs sustained commitment to a new round of economic reforms, the United Nations Economic and Social Commission for Asia and Pacific (ESCAP) said on Monday.
"The agenda… should include well-conceived programmes of privatisation of public enterprises, elimination of entry barriers to small-and-medium enterprises in certain sectors and exit strategy for bankrupt firms," ESCAP’s annual report said.
ESCAP forecast economic growth for India at 6.9 per cent in 2000/01 (April-March), 7.1 per cent in 2001/02 and 7.2 per cent in 2002/03. India’s GDP grew by 5.9 per cent in 1999/00 compared with 6.8 per cent a year earlier.
ESCAP said the reforms of the early 1990s seemed to have put India firmly on the path of high growth, and its GDP would grow by 7.0 percent during 2000-02, "assuming that there are no major internal and external shocks and that the pace of second generation economic reforms is sustained".
India’s early round of economic reforms which began in 1991 centred mainly around abolishing government licences on most industries, setting capital markets free from state controls and making the rupee fully convertible on the current account.
ESCAP said India had made considerable progress in trade policy reforms in recent years, but it needed to do more. "…The average tariff rate (on imports) is still one of the highest in the world and the trade regime remains complex, with a variety of concessions, exemptions and certain quantitative restrictions on imports," it said.
India reduced the maximum ceiling of custom duties to 29 per cent from 125 percent between 1990 and 1999, and has indicated commitments to lower it further in the next five years.
ESCAP said India’s trade deficit in 1999/2000 was expected to widen from a year earlier owing to higher oil prices and increased expenditure on intermediate goods and inputs required for greater industrial activity and higher output.
India’s trade deficit rose to $8.62 billion in 1999/2000 from $8.25 billion in 1998/99, the government said earlier this month.
