"If we manage to get this one decade of 7 percent growth, we are likely to be able to get the poverty rate down to 5 percent and take 200 million people out of the state of poverty," he said in his address to the opening plenary of the 17th India Economic Summit. "If we are able to achieve this...we would be the last generation in India to have experienced mass poverty around us. [This] is a great goal; one that should motivate all of us."

The annual India Economic Summit is organized jointly by the Confederation of Indian Industries (CII) and the World Economic Forum (WEF). This year over 500 business leaders from India and other countries, senior government officials and experts from 28 countries have gathered in the nation's capital for the three-day summit. Under the theme India: Changing Paradigms, the meeting is to focus and reflect on a new phase (of) reforms set to take place in India. Following the September 11 attacks in the United States the program was restructured to address the monumental changes in the global economy.

“We have prepared a comprehensive agenda looking not only at…the economic and financial sector, but also at social and cultural affairs” said Collete Mathur, Director of the World Economic Forum. “We will also hold special sessions to discuss the new state of our world following the 11th of September.”

According to Mathur the summit program is based on five pillars: the current state of the Indian economy; the state of the world in the aftermath of September 11; India’s performance in new industries; India and its role in the world; and issues of social and cultural relevance.

Sinha spoke on achieving the magical 7 percent growth rate, giving a broad outline of how India could remain on the road to high annual growth, a process that will be difficult. “We are now into what is commonly called ‘the second generation of reforms,’” he said. “It becomes more difficult to secure change, since it involves addressing the concerns of many parts of society, it involves legislation, and it involves coordination of activities between the center and the states.”

India, with a projected growth rate of over 5 percent in fiscal year 2001-2, is one of the few countries in the world that will see growth in the coming year. Just a week ago it was officially announced that the United States is in a recession and the Japanese economy, one of the other major global economies, has been stagnant for several years. Using this fact, Sinha urged foreign investors to come to India.

“There is a popular perception that while India has enormously positive democratic values and human rights, [it] is a slow-moving country where profits and growth are hard to obtain,” he said. “I would like to make [the point that] the global economy is experiencing slow output growth and it is well-known that China and India are likely to be the only major countries with strong growth this year.” He went on to discuss the findings of a study on growth over the last 20 years, which show that India had the 4th highest growth of GDP over these years.

Former Finance Minister Manmohan Singh, often called the architect of Indian economic reforms, spoke to the delegates in the evening. He suggested that the blame for the current economic slowdown is a result of the inefficiency of the Bharatiya Janata Party (BJP) government, which has been in power since 1996.

“There has been a gradual slowing down of the pace of economic growth in our country,” he said. “The highest growth rate was reached in 1996-97 and thereafter…the average growth rate has been no higher than 5.5 percent. When we [the Congress Party] were in office the average growth rate was over 7 percent per annum. What is happening in India cannot simply be blamed on global phenomena.”

Singh stressed the need for broad-based reforms to India’s fiscal system “Financial sector reforms have not touched on the rural financial system, reform of the regional rural banks, the reform and strengthening of the state financial corporations,” he said. “These are the institutions which need (29:52 04)

Since 1991, when India started the first phase of liberalization, there has been a lot of progress in the Indian economy. Arun Shourie, Minister of Divestment, discussed the need for political consensus on privatization. This consensus is unlikely to be explicitly reached, he said, because of the political norms in India, which require members of the Opposition to disagree with steps suggested by current members of Parliament.

“There will not be a consensus in words because of the circumstances of Indian politics and journalism,” he said, “but there will be a consensus in practice. Everybody has exempted himself from proposing or seeing through a solution.”

Citing some examples of the difficulties in leading privatization in India he said, “When a reform is first proposed there is a lot of noise and opposition. When, three to four years later, the reforms are implemented, no one even notices.” In the last year there have been at least ten lengthy debates in Parliament regarding privatization, he said, totaling over 80 hours of session time.

Udayan Bose, Chairman of Lazard India Limited, described the frustration of leading the privatization of the 26 government owned hotels in India. Bureaucracy weighs down the system and he has often had to go back and forth between different offices to get required paperwork and signatures. “There must be a broad political consensus about privatization,” he said. “But there also has to be a consensus within government departments and before that occurs [efficient privatization] is not going to happen.”

These are not isolated problems. “It’s only when you start privatizing that you realize all the problems,” said Shourie. “Of the five hotels in Delhi the land titles are not available for any of them, none of them has completion papers, none have a fire inspection certificate.” The process is slow, but Shourie and members of his department are determined to see it through.

“Each hotel is like doing a completely different privatization,” said Bose. “We’ve now sold six, only 20 more to go.”

Overall the day was marked with optimism, though one delegate who has been to four consecutive summits said that much is said and little is achieved at these meetings. “I’ve heard the same things every time,” he said. “Maybe this time there will be more action.” Indeed, the catch phrase of the day was action, with delegates and speakers determined to counter the effects of the global economic downturn.

“The global slowdown and international terrorism are both factors with a strong impact, but if these are managed internally and practically the Indian economy can still grow at a rate of about 6-7% per annum,” said Singh.