India needs more reforms to grow at 8.5-9%: Virmani

Worried over slowing economy, India's representative to the International Monetary Fund(IMF) Arvind Virmani today said the country's growth rate will continue to decelerate unless steps are taken to speed up the pace of economic reforms.

"It [India's economic growth] will keep declining slowly and steadily unless we speed up the pace of reform. If we want India to grow by 8.5-9% in next decade or two, reforms definitely have to be stepped up," Virmani told PTI in an interview.

India's economic growth rate is expected to decelerate to three-year low of 6.9% in 2011-12 from 8.4% a year ago.

Because of political opposition, the government has not been able to push through reforms in key areas like allowing foreign direct investment (FDI) in retail, further opening of insurance sector and implementation of Goods and Services Tax (GST).

Questioning the rationale behind the proposed Food Security law which aims to provide legal entitlement to subsidised foodgrains to 63.5% of the country's population, Virmani said, "I don't think that this is going to solve the problem of hunger, malnutrition and poverty.

"The problem of hunger is not a problem of money or food. Its a question of identifying who these people are," he added.

Pointing out that former Prime Minister Indira Gandhi was the first to implement poverty elimination programme, he said, "Lld poverty alleviation programme did not work...When old programmes are not working then why we are adding new ones?"