More liberal era foreseen in Indian economics

Press, 3 November 1984, Page 30

More liberal era foreseen in Indian economics

NZPA-Reuter New Delhi The assassination of Indira Gandhi was unlikely to jar India’s economic growth and might open a more liberal era with a young Prime Minister at the helm, industrialists and businessmen have told Reuters.

They said Rajiv Gandhi, aged 40, who succeeded his mother, Indira, aged 66, had no set economic ideas but leaned towards a more open economic system. His mother left behind her a strong economy highlighted by a record grain harvest and a boom in oil output, but her strong socialist views and strict controls on industry irked businessmen.

"Rajiv Gandhi starts on a clean slate,” said Mr H.P. Nanda, chairman of Escorts, Ltd, India’s tenth largest private company. “He has no set views and he understands our problems.” “Rajiv’s outlook has been very constructive. He has emphasised increasing industrial and farm production, which is the need of the hour,” said D.H. Pai Panandikar, secretary general of the Federation of

Indian Chambers of Commerce and Industry. Pai Panandikar said Rajiv Gandhi favoured inflow of foreign technology and overseas investment.

One Western diplomat told Reuters he did not expect any change in economic policy, certainly not in the short-term with national elections due in two months. “He has to maintain the stability of his country and the party, and then the election. The economy cannot be his first priority,” the diplomat said. He said he doubted that there would be any longterm changes, because Rajiv Gandhi was very inex!ierienced in economic maters and was likely to have the same team of economic advisers.

Pranab Mukherjee, Finance Minister since 1982 and a key economic adviser since 1974, remains in the new Cabinet but has not yet been assigned a portfolio. He has an excellent rapport with Rajiv, economic analysts said. “I see India continuing its basic policy of self-reliance and managing its economy

so as to retain its excellent credit rating in the world,” the diplomat said.

Another Western diplomat said that there had been a slowing down of foreign investment ahead of the election and he expected this to continue until the result was known and the new Government had consolidated its position.

Sudhir Desai, India manager of Chase Manhattan Bank, told Reuters that India’s high credit rating on the world market would not be affected as no big shifts in economic policy were likely.

M.S. Patwardhan, president of Associated Chamber of Commerce and Industry, told Reuters in Bombay he expected more liberal economic policies under the new Prime Minister.

The president of Bombay Chambers of Commerce and Industry and chairman of Hindustan Lever, A. S. Ganguly, said that the growth achieved in agriculture and industry in recent years was likely to be consolidated during Rajiv’s term.