Indian PM commits to reforms

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SaiGon GP English - 46 month(s) ago 6 readings

NEW DELHI, March 26, 2011 (AFP) - India's prime minister has reaffirmed his Congress-led government's commitment to economic reforms as the administration battles a host of corruption scandals.

The new thrust on reforms is seen by analysts as an attempt by the government to re-energise its legislative programme and take away the focus from the corruption storm.

"I confirm our commitment to new wave of reforms," Singh, widely credited with opening up India’s economy in 1991 while finance minister, said in a speech late Friday.

He added that he welcomed the "national focus on corruption because it will, as it already has to an extent, generate public pressure in favour of more reform".

The government has been hit by a slew of corruption scandals, ranging from a cash-for-votes controversy and the cut-price sale of telecoms licences to graft surrounding last year's Commonwealth Games.

Singh's own "Mr Clean" reputation has been tainted by the scandals, with the 78-year-old prime minister being portrayed by critics as a weak leader who turned a blind eye to corruption in his administration.

Singh said the battle against corruption is a "relentless one" requiring "eternal vigilance".

Economic liberalisation had "ended old opportunities for corruption and favouritism... but human ingenuity and the desire to make a quick buck are such that the greedy are able to tap into new sources of corruption", Singh said.

India's economic reform programme has been stalled by the scandals that have paralysed parliament and been a factor in discouraging foreign capital flows, analysts say.

"What India needs is a political consensus (on reform)", Singh said.

Singh said the government was committed to carrying forward reforms in the financial sector to sustain India's high growth -- expected to be nine percent in the fiscal year starting April 1 -- and ease high inflation.

Putting into effect of India's proposed national Goods and Service Tax (GST) is long overdue, he said, adding that "we are committed to implementing it" from 2012.

India's government earlier in the week introduced legislation to pave the way for the passage of the far-reaching reform aimed at simplifying tax on goods and services.

The long-delayed GST seeks to harmonise the tax structure among India's 29 states and create a uniform levy system.

It is one of the government's most important proposed reforms.

But it faces major hurdles to become law. It must be approved by two-thirds of parliament and half of the country's states, meaning the coalition will have to rely on rivals to see it passed.

Some states, fearing loss of revenue and autonomy in setting taxes, and the main national opposition Bharatiya Janata Party (BJP) are opposed to the changes.

The government is also aiming to overhaul financing regulations to make it easier to fund vitally needed projects to overhaul India's dilapidated infrastructure.

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