| ok, rediff story. but still look at the figures and the sectors
| there is also a mention of 'labour reform', what does this
Indian economy chugs along despite bottlenecks
K R Sudhaman, in New Delhi | December 26, 2005 13:25 IST
The Indian economy, whose prospects looked bleak with tsunami
devastation and inflationary pressure due to soaring international oil
prices at the beginning of the year, was on a roll in 2005 providing the
necessary launch-pad to make the country an economic powerhouse with
over eight per cent growth in the new year.
Surging stock market with Sensex hovering around 9,200 points, inflation
at less than five per cent, interest rates benign, merchandise exports
likely to touch $100 billion and over 8.1 per cent growth in the first
half of this fiscal, the economic prospects have never been so good with
strong macro-economic fundamentals enabling the country to move on to
the higher growth path of 8-10 per cent in 2006.
Compulsions of coalition politics and particularly pulls from Left
parties, some of the reform areas like divestment, FDI in retail,
insurance, pension and banking reforms might have received some set back
during the year, but overall the liberalisation process has moved
forward quietly especially in infrastructure development like roads,
airports, ports and railways even though the economy was far away from
removing critical bottlenecks to growth.
To unlock the true potential of the Indian economy, the government has
embarked upon the four-year business plan called Bharat Nirman to create
necessary infrastructure at a cost of Rs 1,74,000 crore (Rs 1740
billion) to achieve identified goals in six selected areas of rural
infrastructure - irrigation, rural water supply, rural housing, rural
roads, rural telephony and rural electrification.
Bharat Nirman taken together with the initiative to guarantee rural
employment, through the implementation of the National Rural Employment
Act and the initiative to improve rural health, through National Rural
Health Mission and rural education through Sarva Shiksha Abhiyan, there
is certainly going to be a new deal to rural india provided they are
It is not that ambitious programmes have been embarked upon only for
rural India. The government also launched the Urban Renewal Mission
aimed at setting right the infrastructure in the top 60 urban areas in
the country including the major cities.
Apart from Rs 1,74,000 crore to be spent in the next four years under
the Bharat Nirman programme, the government is to spend Rs 60,000 crore
(Rs 600 billion) in Urban Renewal Mission, an additional Rs 1,70,000
crore (Rs 1700 billion) on highways programme. That apart, a massive
spending is expected in the 'National Rural Employment Guarantee Programme'.
The government has also proposed to spend Rs 25,000 crore (Rs 250
billion) on the railway freight corridor project to connect Mumbai,
Delhi and Kolkatta and also on modernisation of Delhi and Mumbai,
Chennai and Kolkata ports as well as major ports in the country.