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Singh on showcase mission

New Delhi, Sept. 24: Finance minister Jaswant Singh has been asked to explain to the Western leaders, including US treasury officials, that second-generation reforms in India have not ground to a halt and that any discord over it within the Cabinet is merely over its calibration and timing.

Top sources in the finance ministry said the PMO has asked Singh to take on this job to blunt the arguments posited by Standard and Poor’s, the international credit agency that last week downgraded the country’s local currency investment rating to junk grade.

The PMO apparently feels the downgrade is, in part, a political move and can only be countered politically by an experienced minister like Singh, who has experience of handling the foreign office. The finance minister leaves for a World Bank-IMF meeting tonight and will stay in the US till the first week of October, using the opportunity to network with Western economic ministers, corporate leaders and US treasury officials to explain India’s stance on various key reform agenda issues such as FDI, PSU privatisation programme and labour reforms.

Both the Indian government and many in India Inc feel the S&P’s downgrade is a blatant attempt to pressure the country to tailor its politico-economic policies to suit the rating agency’s world-view.

However, the government also feels there is need to explain its stand, lest Western powers start believing that the clock is turning around in New Delhi. Besides the rating agencies, Western diplomats have also been expressing concern on these issues at meetings with key economic ministers and bureaucrats. Increasingly, diplomacy in New Delhi has been subject to corporate pressures, seeking concessions that could benefit them.

Singh will be explaining to the global community what has now become the government’s standard line — there is unanimity among political parties over the course of reforms, reform measures taken are irreversible but that as in all democracies, India will continue to debate the timing and calibration of measures to suit its own needs.

BJP ministers like L.K. Advani, Ram Naik, Murli Manohar Joshi, as well as ministers from other NDA partners like George Fernandes and Balasahib Vikhe Patil, have been behind moves within the Cabinet to stall disinvestment in petroleum companies and start a rethink on attempts to raise the FDI limit in key sectors of the economy such as aviation, telecom and insurance.

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