New Delhi, Dec 2: Finance Minister P Chidambaram today admitted that the performance of the UPA government at the Centre was below expectation in two areas-- one was its inability so far to push forward further reforms in the financial sector, especially in banking, insurance and pensions, and second was its failure to improve the systems for the delivery of social security programs.
Expressing the hope that these reforms would take place in the remaining tenure of this government, he said the Centre has considerably increased the outlays on these programmes, but this has not yet translated into better outcomes.
Addressing a lunch session on “The Shifting Power Equation," at the India Economic Summit 2007, organized by the Confederation of Indian Industry (CII) and the World Economic Forum, here, Chidambaram said the rigidity of the bureaucracy remains a hurdle in achieving more inclusive growth.
He expressed happiness over the growth of Indian companies, both organically and inorganically, and called for creating a competitive environment to promote entrepreneurial skills in the country.
On the general perception that the global economic power centre was shifting to developing countries, Chidambaram said that although economic growth was being driven by the developing world, economic power still resided with the developed world.
India and China now contribute 60 per cent of the world"s economic growth. However, the key factors that drive economic power were knowledge, financial resources and material resources such as oil and gas. And, as long as the developed nations have control over these, they would have an edge over developing nations, he said.
On an optimistic note, the finance minister said India would acquire these advantages through its ability to produce goods and services at a lower cost, nimbleness of its entrepreneurs, the managerial talent, demographic advantage and the drive of its younger generation.
He said that through better policies, good governance and better implementation, “we can reap the benefit of our demographic dividend and not allow it to become a liability. Our water resources can also be managed better." He said India could accelerate the growth process if the stakeholders were willing to experiment with new models of delivering goods and services, instead of depending on old failed models.
Speaking on the global forum, Chidmbaram said India has been playing a responsible and reasonable role. India was committed to keep its per capita emissions below the level of the developed countries. He admitted that India was lagging behind in achieving the millennium development goals but urged the world to help India carry forward its drive towards better health and education.