October 10, 2012
NEW DELHI: India's recent burst of reforms will lead to stronger economic growth, visiting US Treasury Secretary Timothy Geithner has said, reflecting the turnaround in global sentiment towards the country after the government relaxed foreign direct investment norms.
October 10, 2012
NEW DELHI: India's recent burst of reforms will lead to stronger economic growth, visiting US Treasury Secretary Timothy Geithner has said, reflecting the turnaround in global sentiment towards the country after the government relaxed foreign direct investment norms.
"The recent reforms advanced by PM and FM will help provide a foundation for stronger economic growth" Timothy Geithner said on Tuesday.
Geithner, who was in Delhi along with Fed Reserve Chairman Ben Bernanke, also sought to address the concerns of IT professionals over visa rejections and said he expected a significant rise in visa issuance.
"The recent reforms advanced by Prime Minister (Manmohan) Singh and (Finance) Minister P Chidambaram will help provide a foundation for stronger economic growth, an increase in investment and more widespread gains in income," Geithner said at a joint press conference with Chidambaram after their bilateral meeting on Tuesday.
In a joint statement after the India-US Economic and Financial Partnership meeting, Chidambaram and Geithner said they had discussed ways to lower trade and investment barriers and steps to strengthen cooperation to fight money laundering and terror financing.
FM Voices Fears Over QE3
The third partnership meeting was attended by RBI Governor D Subbarao and his US counterpart, Ben Bernanke, among others. The reforms have been welcomed around the world, Geithner added, voicing the restoration of faith in India after the world view turned largely negative when the government amended the income-tax Act retrospectively, put out tax avoidance rules and deferred urgent reforms.
"I feel very encouraged by the initiatives taken by the Indian government," Geithner said later in the day, at an interactive session organised jointly by CII and US-India Business Council. "It's good for us that we are here this time when there is so much change in air," he added.
Since mid-September, the government has unleashed a number of measures to attract foreign investments, address tax concerns and improve business sentiment – announcements that have been greeted enthusiastically by the markets and foreign investors.
Chidambaram said he had raised concerns that the third round of quantitative easing by the US could raise commodity prices, but admitted some of the money could come to India as well.
Under its QE3 programme, the Federal Reserve will buy bonds back to lower long-term interest rates to give a push to the US economy. Commodity prices have not risen that much, so it is too early to talk about its impact and if QE3 improves the US economy, it will also be good for India, Chidambaram said. "But we need to balance both the advantages and disadvantages," he added.
Courtesy: ET
