Bullish on India?

In a speech delivered at the Reserve Bank of India, the Managing Director of the IMF sounds quite bullish on India's economic prospects. Excerpts:

...One estimate indicates that the poverty rate fell from 41 percent in 1992-93 to less than 29 percent in 2000. The reform process has made steady progress, despite changes in political leadership. Looking ahead, it appears that the broad path of reform—if not the pace or details—is firmly established. And success begets success. India is now more than ever a focus for international investors, who are eager to take part in a new India.
...Information technology is far from the entire story. A few examples: India is projected to have the second fastest growing tourism sector of any country in the world over the next 10 years. Steel production in India is now among the lowest-cost in the world. Pharmaceutical and biotech firms are likewise very competitive internationally. And Indian firms are increasingly carrying out their own R&D. Last year alone, Indian pharmaceutical companies filed about 200 patents.

Of course, there was a dose of advice on what to do as well.

...First, reducing the borrowing needs of government would help free resources for private investment, which remains low by regional standards.
...Second, public investment is also low compared with much of Asia. India's large infrastructure gap acts as an important constraint on growth.
...Third, lower fiscal deficits will improve financial intermediation.
...Quicker cuts in tariffs, combined with a lowering of nontariff barriers and improvements in the business climate, would allow Indian business to achieve scale economies and to fully take part in international production chains.
...India needs to continue to restructure its domestic economy, to allow it to reap the full benefits of globalization.

Quite frankly, this does not sound to me as a bad advice. Interestingly, Mr. de Rato talks about the role manufacturing sector in creating jobs as opposed to Stephan Roach.

Comments

[Saheli]

Wow, nice heads up on that speech. One estimate indicates that the poverty rate fell from 41 percent in 1992-93 to less than 29 percent in 2000. I would love to know what the methodology/citing for that estimate is. That's an impressive number.

[APB]

The Planning Commission for the Government of India has some statistics on poverty rates, but the data is shoddy. The 41% figure in 1992-93 is available there. Data on WRI web site on poverty in India shows the 29% figure in 2000, but does not cite the source. Of course, definition of poverty in India is different from the international definition ($1 per day).

[Atul]

For a moment if we ignore the numbers and concentrate on "dose of advice " , don't we or our government know about it already that needs to be done?