India's new premier promises to help poor

Singh seeks reforms `with human face,' peace with neighbor Pakistan

May 21, 2004|By Paul Watson | Paul Watson,LOS ANGELES TIMES

NEW DELHI - Incoming Prime Minister Manmohan Singh promised yesterday that he will reshape economic reforms to benefit millions of India's poor, promote religious harmony and seek peace with rival Pakistan.

"I have always been saying that we need reforms," Singh told reporters here. "We will increase reforms, but it will be reforms with a human face, reforms that benefit the common man of our country."

Singh said his coalition government's goal is to be friendly to investors while addressing some of India's most chronic problems, such as poorly funded hospitals and schools, and the lack of adequate housing for hundreds of millions living in poverty.

"It's a very difficult task," said Singh, an Oxford-educated economist. "But we in India have, since time immemorial, proved that we don't get unnerved by difficulties."

Although India's economy was growing at an annual rate of about 8 percent in recent months, the central bank predicts growth will slow over the next year. That won't make it easier for Singh to tackle several economic problems, such as large - and growing - budget and trade deficits.

He might be sworn in as prime minister as early as tomorrow - if he can finish hard bargaining with coalition allies over Cabinet posts.

The Congress Party's Italian-born president, Sonia Gandhi, refused to take the prime minister's job under withering attacks from Hindu nationalists over her foreign roots. But she is expected to have a strong hand in Singh's government.

Singh, a Sikh, will become India's first non-Hindu prime minister.

"Unity and communal harmony are a priority," he said, calling on Indians to embrace the inherent tolerance of Hinduism, the predominant religion of the nation of more than 1 billion.

"We are the most tolerant civilization in the world - that is our great heritage. We have to strengthen and build on that heritage," he said.

Singh also vowed to make progress in peace talks with Pakistan that are due to begin soon. The central issue, and the most difficult to resolve, is the decades-old dispute over the divided Kashmir region.

"We must find ways and means to resolve all outstanding problems that have been a source of friction, without sacrificing our national security imperatives, to create an environment to move forward and improve our relations with Pakistan on a priority basis," he said.

Singh repeated that his government will not sell profitable state-owned companies, or those he called "enterprises of strategic nature," such as oil companies and banks. India's state-run banks handle almost 70 percent of loans and other banking transactions. Free-market advocates say that puts a heavy drag on the economy.

As finance minister from 1991 to 1996, Singh began opening India's economy to foreign capital and trade, and loosening government controls. He told his many opponents there was no choice. The country was heading for bankruptcy.

India had an economic growth rate below 1 percent a year and $1 billion in foreign currency reserves then. Now, to go with the stronger growth, the central bank has more than $110 billion in hard currency.

But Singh still has enormous economic problems on his hands. In addition to the federal budget and trade deficits, he faces huge state budget deficits, complex tariff barriers and regulations, stubborn drought in several states, rampant corruption, crumbling infrastructure, and chronic shortages of power and clean water.

The Los Angeles Times is a Tribune Publishing newspaper. The Associated Press contributed to this article.

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