8216;India must carry difficult eco reforms8217;

The US President answered a wide range of questions on the state of the Indian as well as global economy,Indo-Pak ties and American strategy in the Asia-Pacific region during an interview.

Obama was careful not to be directly critical of the negative investment climate in India but cited the concerns of the American business community to make his points.

Many in the American business community,8221;one of the great champions of the US-India partnership8221;,have expressed concerns that the investment climate in India is deteriorating,he said.

8220;They tell us it is still too hard to invest in India. In too many sectors,such as retail,India limits or prohibits the foreign investment that is necessary to create jobs in both our countries,and which is necessary for India to continue to grow,8221; Obama said.

Refraining from prescribing any solutions for India8217;s economic difficulties,the President said,8221;it is not the place of the United States to tell other nations,including India,how to chart its economic future. That is for Indians to decide.8221;

Obama noted that 8220;there appears to be a growing consensus in India that the time may be right for another wave of economic reforms to make India more competitive in the global economy.8221;

Obama then went on to add,8221;and as India makes the difficult reforms that are necessary,it will continue to have a partner in the United States.8221;

8220;It is important,though,to put this in the context of India8217;s incredible growth and development in recent decades,8221; he said.

The President pointed out that India had lifted tens of millions of people out of poverty to create one of the world8217;s largest middle classes.

8220;Indian innovation is an engine of the global economy. And even with the recent challenges,the Indian economy continues to grow at an impressive rate. The Indian people have displayed a remarkable capacity to meet India8217;s challenges,8221; he said.

Describing Prime Minister Manmohan Singh as 8220;my friend and partner with whom I have worked closely8221;,Obama said he valued the insights of the Indian leader at various international fora including the recent G20 meeting in Mexico.

He said at the G20 they agreed that one of the best things they could do to get the global economy growing faster was to renew the focus on growth and job creation in their own countries.

8220;That8217;s my priority in the US. Of course,one of the most effective ways we can create jobs is to continue expanding trade and investment,including between the US and India.8221;

The President said they need to keep strengthening the pillars of the long-term economic vitality and competitiveness,including the education of the people of the two countries,science and technology,and the modern infrastructure that allows them to move goods and services faster.

8220;We need to keep up the fight against corruption,which stifles innovation and is one of the biggest barriers to job creation and economic growth around the world. These are some of the things we can do together as global partners,8221; he said.

Obama said one of the reasons why he valued the G20 was that it was the only place where leaders of the world8217;s largest economies 8212; developed and developing 8212; can come together and address the economic challenges that affected everyone.

Right now,he said,the global economy continued to face a number of challenges. Global growth,including growth in emerging economies like India,has slowed.

The situation in Europe has,of course,been a concern,Obama said. The G20 summit in Mexico was therefore an opportunity for them to hear directly from European leaders on the progress they were making and on their next steps.

The President said,8221;In our global economy,we can8217;t just have a few leaders of the most advanced economies making decisions that touch the lives of billions of people around the world.

8220;That8217;s why we made the G20 the leading forum for global economic decision-making,to give developing and emerging nations,like India,a larger voice. It8217;s why we increased the role of India and other emerging economies in international financial institutions. These institutions are stronger because of India8217;s active participation.8221;

Obama said he believed that the European leaders grasp the seriousness of the situation and were committed to holding the Eurozone together with the steps they have taken in the recent weeks.

8220;All of us have a profound interest in Europe8217;s success and the US will continue to support our European friends as they work through this challenge.8221;

Solutions to country8217;s problems must be found within:India Inc

India Inc today acknowledged that economic reforms were lagging and growth had slowed down but said solutions to the situation should be found within and not as prescribed by outsiders.

Reacting to US President Barack Obama8217;s assertion that the government must carry out 8220;difficult8221; economic reforms,India Inc said India remains a strong investment destination with strong long-term growth prospects.

Obama in an interview in Washington said American firms say 8221; it is still too hard to invest in India. In too many sectors,such as retail,India limits or prohibits the foreign investment that is necessary to create jobs in both our countries,and which is necessary for India to continue to grow8221;.

Obama said,8221;there appears to be a growing consensus in India that the time may be right for another wave of economic reforms to make India more competitive in the global economy.8221;

Acknowledging that the nation lagged in reforms in sectors like retail,aviation,defence and insurance,India Inc said Obama or any other person cannot be 8220;dictating Indian government or Indian policy makers8221;.

8220;US has its own problem and India has its own. Our government will take decision as per our own compulsions and requirements. However,we do need reforms but Obama or any other person cannot be dictating Indian govt or Indian policy makers,8221; industry chamber Secretary General D S Rawat said.

US,he said,also had lot of 8220;limitations8221; like the recent restrictions imposed on BPOs. 8220;But it is there decision. Similarly,decisions taken our policy makers should not be questioned because our economy is till doing much better than most of the developed countries,8221; he said.

CII Director General Chandrajit Banerjee said,8221;India was resilient and was still growing at 6 per cent during the time of global economic uncertainties.8221;

Banerjee said,8221;However,there are some issues which need to be addressed.8221;

8220;We still need reforms in sectors like retail,aviation,defence and insurance. Our understanding is that we should be seeing reforms over a period of time,8221; he added.

FICCI Secretary General Rajiv Kumar said India8217;s long-term growth remains strong and intact.

8220;There are number of positive structural features that will ensure that India continues to attract investments and maintain the rate of GDP growth,8221; he said.

8220;However,it is evident that some significant reform measures have to be urgently. We are convinced that investors sentiment will become positive if these measures are implemented,8221; Kumar said.

8220;In recent pronouncements by the government have given a degree of reassurances in this regard,8221; he added.

CII said investor sentiments towards India was quite strong but 8220;certain developments8221; like retrospective amendments in IT Act and General Anti-Avoidance Rules GAAR have affected the mood. 8220;However,we know that the government would adequately address these issues8221;,Banerjee said.

Assocham8217;s Rawat also said the government was fully alive of the need to allay investor concerns and expressed confidence that the government 8220;will take desired actions.8221;