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Swadeshi no bar to business, Sinha tells Americans

Finance Minister Yashwant Sinha extended an open invitation to American industrialists and non-resident Indians to invest in India, making it clear that the much-misunderstood concept of swadeshi would not come in their way of doing business in the country.

Speaking at a meeting organised by the Confederation of Indian Industry in Washington DC, United States, he insisted that the swadeshi spirit of the Bharatiya Janata Party-led government was definitely pro-India but, at the same time, it was not anti-foreign.

He said the government wanted the cooperation of the foreign investors in infrastructure and the high-tech sectors, to put India back on the higher growth path, a prerequisite to pull the country out of the poverty.

Sinha, the first minister of the new government to visit the United States, said there was no question of allowing any let-up in the implementation of the economic reform process introduced in 1991 by the then P V Narasimha Rao-led Congress government.

On the contrary, the three-week-old Vajpayee ministry would "broaden, deepen, and accelerate" the reforms process, he added.

Sinha was worried over the decline in the economic growth rate in the country from 7.6 per cent to 5.6 per cent last year. This is estimated to go down to 5.2 per cent. He said this had happened primarily due to political instability, the kind of which was unavoidable in democracy.

He said the new government would restore the stability in the nation's body politic, adding that the BJP had the wherewithal to do so. He pointed out that unlike the last time when the main party, the Congress, was outside the United Front ministry, this time the majority party, the BJP, was at the centre of the governance. The other major stabilising factor was that it had a leader in A B Vajpayee, whose popularity and acceptance cut across party lines.

Sinha said that government was keen on achieving the growth rate of between 7 and 8 per cent this year. "I will invite you to consider these factors very carefully and help us in achieving our objective," he said addressing the investors present at the meet.

He said his government was keen on establishing a long-term relationship with foreign investors by bringing out a national consensus on economic reforms. This would end the element of instability which crept in at the time of a change of government.

He said he had consciously picked up America for his first visit abroad. The US was India's largest trading partner and it had invested the highest amount in the country.

He said the new government would like to see a 100 per cent increase in the foreign direct investment within a year. Last year, it was about $4 billion.

The minister, who is in Washington DC to attend the annual spring meeting of the World Bank and the International Monetary Fund, said his government would provide an "early clearance facility" for the approval of projects submitted by the foreign investors to save them from running pillar-to-post for the purpose as had been the case. A trouble-free process would be put in place, he added.

"It is not merely business as usual but it means better business in the new set-up," he said, adding, "India had been close for business for the last 18 to 20 months but we are back in business."

He made it clear that those who had invested in India had nothing to fear. Despite political change, there was an element of continuity in policy.

Then, pointing to Finance Secretary Montek Singh Ahluwalia sitting next to him on the dais, he said, "Ahluwalia represents continuity, and I represent the change."

He said the government was fully aware of the factors that had stunted the economic growth. These included lack of demand and a high budget deficit which was of the order of about 6 per cent. Steps would be taken to bring down to about 4 per cent this year.

What bothered him most, he said, was the impression sought to be created by the media abroad as if his party, the BJP, was against reforms and out to take the country in the middle ages. In fact, the BJP had been demanding such reforms during the heydays of socialism in the country. Then, it was not fashionable to talk about opening the markets, he added.

Asked about the financial sector reforms, he said the government would go ahead in this area on the basis of the recommendations of a committee which was looking into the subject. The report was expected soon.

In the insurance sector, which is still under the state control, he said an opening would be made by liberalising the domestic companies first.

UNI