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IMF hopes for early end to political crisis

C K Arora in Washington

International Monetary Fund Managing Director Michel Camdessus today hoped India would soon get over its current spell of political instability, promising all assistance to help New Delhi achieve a higher rate of economic growth.

He made this observation at a press conference in Washington on the eve of the IMF-World Bank annual meeting.

Camdessus said he would very much like to help India's efforts to grow at a faster pace. The present growth is inadequate for India's potential and the extent of its poverty, he said.

He said the political instability that currently obtains in the country was not in the best interest of bold economic reforms and stimulation for private investment.

The IMF chief said India's strategy for reform and acceleration of development was well known. "We believe India and the world cannot be satisfied with India growing around 5 per cent a year. It has to grow at a more rapid pace to make a dent on its poverty."

He wanted India to grow at the rate of 7 or 8 per cent a year, maintaining its stability.

For faster growth, he suggested reforms in the budgetary field and reduction in central and state deficits.

Camdessus made out a strong case for speeding up the pace of reform in India's financial sector. Greater liberalisation could certainly contribute to a higher rate of growth, he said.

However, the IMF has projected a growth of less than 5 per cent for India in 1999 and 2000.

UNI

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