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Wednesday, 22 August, 2001, 14:22 GMT 15:22 UK
Indian minister calls for faster reform
Indian Prime Minister Atal Behari Vajpayee
Mr Shourie had been thought to be critical of Prime Minister Vajpayee
India's privatisation minister Arun Shourie has voiced his concerns about the country's finances and the slow pace of reform.

But he has dismissed claims that he is critical of Prime Minister Atal Behari Vajpayee's ability to push through reforms.

In an interview with the BBC's World Business Report, Mr Shourie admitted to concerns about the country's deteriorating public finances but said that the groundwork for privatisation had been laid.

He described Mr Vajpayee as one of the driving forces behind the reforms.

"It is because of his personal endorsement that things get done," Mr Shourie said.

Logjam

"Unfortunately we have a fractured electorate that leads to a fractured legislature," he said.

"Labour law reforms, privatisation...they get stuck in a logjam.

"The first point is to increase the rate of investment, especially of public investment that requires a widening and deepening of the tax net," he said.

"Secondly, it requires that the utilities, like water, power, railways... be self financing. For that we have to increase user charges and make collection better.

"These are the two central points of public investment."

India in crisis?

Ten years since India introduced ground-breaking liberalisation measures after a balance of payments crisis, there is now fresh pressure for reforms.

Policy experts say that unless growth picks up, India will face a further deterioration in its public finances.

The country's budget deficit exceeded 10% of gross domestic product last year.

US credit rating agency Standard and Poor's cited the country's high level of domestic debt as one reason for the downgrade of its credit rating.

Many say the failure to implement reform reflects Mr Vajpayee's failure to force the 19-party coalition in power to push through change.

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 ON THIS STORY
Privatisation minister Arun Shourie
"A fractured electorate and a fractured legislature"
See also:

19 Aug 01 | Business
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17 Aug 01 | Business
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16 Aug 01 | Business
India's powerless foreign investors
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