India unveils extensive reforms

NEW DELHI - Reuters

Prime Minister Man mohan Singh says he hopes steps will strengthen growth. AFP photo

After months of dithering on the economy, India’s beleaguered government roared back to life in dramatic fashion on Sept. 14, announcing big bang reforms as part of package of measures aimed at reviving growth and staving off a ratings downgrade.

A day after sharply increasing the price of heavily subsidized diesel, the government said it was opening up its supermarket sector to foreign chains and would allow more foreign investment in airlines and broadcasters. It also approved the sale of stakes in four state-run industries. Facing the threat of having its credit rating downgraded to junk, the Indian government has been running out of time to show it is serious about fixing an economy that has been hard-hit by a global economic crisis and political gridlock at home.

Underscoring the need for speed, India’s inflation rate jumped to 7.55 percent in August, mainly from higher food prices, data showed Sept 14.

“I believe that these steps will help strengthen our growth process and generate employment in these difficult times,” Prime Minister Manmohan Singh said via Twitter.

Infighting in the fragile coalition government led by Singh’s Congress party had earlier forced it to shelve the retail and aviation reforms, casting a shadow over India’s aspirations to join the world’s leading economies.