By IANS
New Delhi : Strong economic growth of over eight percent may be the best achievement of India’s ruling coalition government, but financial sector reforms remain largely unattended, Finance Minister P. Chidambaram said here Sunday.
“Achieving a growth of over eight percent and repeating it for the fifth year would make any government proud. But we have brought the country into discussing inclusive growth,” Chidambaram told the opening session of the India Economy Summit here Sunday.
Speaking on what he viewed as a major drawback for his government so far, the finance minister immediately referred to financial sector reforms, especially in banking, pension and insurance, which were at the heart of the economy.
“We have not been able to push those reforms. But we still have 16 months,” the minister added, referring to the time left for the United Progressive Alliance (UPA) government to complete its five-year tenure.
“What we have managed to say is ‘Don’t debunk growth’. Growth is imperative. But likewise, we also say growth does not mean it is for the top 10 percent of India,” he told at the summit organised by the Davos-based World Economic Forum (WEF).
“Today, everyone talks about both faster and inclusive growth. This philosophy of my government is something we can truly proud off,” he added at the summit, co-hosted by the Confederation of Indian Industry (CII).
Earlier, speaking on the subject of “Shifting Power Equation”, Chidambaram said though India and China may drive the bulk of the global growth today, the economic power had yet to shift from the developed to the developing world.
“China and India contribute 60 percent of the world growth today. But that does not mean economic power has shifted from the developed world to developing countries,” he said.
According to him, the factors that contributed to his line of thinking on this matter had to do with three aspects and listed them as control over knowledge, financial resources and material resources like oil and gas.
Developed nations, he added, continued to attract the best brains, the financial markets continued to be managed in cities like New York and London and oil and gas reserves were largely in the hands of the US, Russia and Latin America.
“But what we can still say is developing countries will compete over the next 10-15 years,” he said, adding: “India and China will continue to drive global growth.”
The finance minister also spoke of what he termed as “demographic dividend” on account of India’s growing young population, vis-à-vis the ageing population in most of the developed countries.
“We can reap the dividends of demographic dividend till 2040,” he said, adding all that was required was to bring the 10 million children out of school into the system and ensure they stayed there for at least 10 years.