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US treasury sec praises India reforms

Posted on Oct 09, 09:21PM | IBNS

US Treasury Secretary Timothy Giethner on Tuesday lauded the fresh economic reforms announced by Prime Minister Manmohan Singh and hoped that it will help economic growth and bring investment.

"India has achieved remarkable economic success in the last 15 years. The recent reforms advanced by Prime Minister Singh and Minister Chidambaram will help provide a foundation for stronger economic growth, an increase in investment, and more widespread gains in income," Giethner said at the US-India Economic and Financial Partnership joint press conference here.

The UPA government in New Delhi has recently thrown open doors to more foreign investment in India's retail, aviation, broadcast, insurance and pension sectors, while also announcing disinvestment in four state-run industries in moves that were long seen as critical to revive flagging growth and confidence in Asia's third-biggest economy, but triggering a huge political backlash from other parities, including a pullout from the government by Mamata Banerjee's Trinamool Congress..

Thanking Union Finance Minister Chidambaram and his colleagues for hosting the third meeting of the Economic and Financial
Partnership, he said: "India is very important to the United States, and I came here to demonstrate our commitment to building on the progress of the last several years."

"We have a very promising and rapidly expanding economic and financial relationship. We have a strong strategic
partnership with close cooperation on security issues," he said.

"We meet at an important time in the global economy, and during a period of significant economic reform in India and the United States. Both of our economies have been affected by Europe's crisis and by slower growth in Asia and around the world," he said.

He said in the United States, "we have made a lot of progress repairing the damage caused by our financial crisis, and laying a foundation for stronger future growth."

"Of course, we still have a lot of challenges ahead of us in improving job growth and in the area of fiscal reforms. The Finance Minister [Chidambaram] and I were joined by Federal Reserve Chairman Bernanke and Governor Subbarao of the Reserve Bank of India.

"We had a very good, substantive discussion about the economic outlook, the risks and challenges, for the U.S. and Indian economies and the global economy," he said.

"We also discussed ways our two economies can lower barriers to trade and investment to facilitate stronger growth and job creation for our citizens.

"We reviewed progress on financial development and reform. In this context, we discussed ways U.S. investors and businesses can best help contribute to India's investment and infrastructure needs. And we reviewed the opportunities for further expansion of Indian firms in the United States and U.S. firms in India," he said.

"We agreed on the importance of improving coordination on bilateral tax matters, including with respect to our tax treaty and implementation of the Foreign Account Tax Compliance Act (FATCA) to address offshore tax evasion.

"We agreed to strengthen mutual cooperation on issues relating to illicit finance, including efforts to combat money laundering,
terrorist financing, and other financial crimes," he said.

Giethner said "will continue our close cooperation in the G20 and the international financial institutions, working to strengthen the global economy and the international financial system."

He said he looked forward to meeting with the Prime Minister later Tuesday.