US warns India of 'pause' in reforms

United States ambassador David Mulford warned India that a perceived 'pause' in the economic reforms process would have serious economic consequences for the country, an assertion contested by Defence Minister Pranab Mukherjee.

"There are signs of a pause in the reforms process in recent months," said US ambassador Mulford while addressing the third Indo-US Economic summit.

He said privatisations had stopped and political reality suggested that reforms in other key sectors and policies of central interest to investors would take longer than envisioned. Mulford also cautioned that there could be "serious economic costs to any loss of momentum on the reform front."

However, Defence Minister Pranab Mukherjee, who was the chief guest, contested Mulford's view saying, "The reforms were no stop-and-go but a continuous process."

Apparently referring to difference of opinion between the UPA and the Left Front, which is supporting the government from outside, he said, "There could be minor hitches in the process of reforms but as you know only too well, democracy is about checks and balances."

"Decisions can be taken only after debate and due consideration. Hasty decision making can have its own negative repercussions," he said elaborating his point.

Mukherjee said the government was working to address issues relating to the economic reforms process.

"The good news is that mechanisms are in place to identify bottlenecks and remove them," he said, adding that since 2000, when the Indo-US economic dialogue was established, a number of commissions and fora had come into existence with the goal of putting business relations onto a higher trajectory.