Copenhagen, Oct. 9: That the one-step-forward-two–steps-back approach to divestment and differences within his own Cabinet have taken their toll with foreign investors was evident when Prime Minister Atal Bihari Vajpayee was forced to go on the back foot while rationalising the slow pace of economic reforms.

Addressing the concluding session of the Third India-European Union (EU) Business Summit in the Danish capital, Vajpayee attributed the slower pace of reforms to the government’s attempt to accommodate the diversity of “perspectives, interests and needs” that existed in India.

Being a democracy, India could not adopt “a shock therapy approach to economic reform”, he explained to an audience, which included the Prime Minister of Denmark, Anders Fogh Rasmussen.

“The same subcontinental size and population, which make India an attractive market, also accommodates a diversity of perspectives, interests and needs… A democratically elected government has to be sensitive to these realities. Public accountability and a social conscience have to govern its actions,” he said.

Vajpayee said what was happening in India could best be explained by a borrowed metaphor “from an earlier era”. India was trying to implement “economic liberalisation with a human face”, he said.

The Prime Minister said this approach had helped avoid a period of recession. It had also given the economy higher growth through the 1990s than that of other countries which also embarked on economic liberalisation during that decade.

The poet in the Prime Minister tried to turn the animal analogies (e.g. dragon, tiger and elephant) for growing economies to his advantage. “The Indian economy is often identified with the elephant. I have no problem with the analogy. Elephants may take time to get all parts of their vast bodies moving forward in unison. But once they actually start moving, the momentum is very difficult to divert, slow down, stop or reverse. And when they move, the forest shakes.”

What the Prime Minister did not say was that no one has heard of two or more parts of an elephant’s body holding separate confabulations on whether to move at all or not.

n  

However, the Prime Minister said India would do everything to meet the expectations of foreign investors — build a national consensus on labour reforms, focus attention on high-priority infrastructure projects and cut bureaucratic procedures through e-governance.

Vajpayee tried to woo investors by pointing out that India’s economic fundamentals remained strong. He said India had “one of the fastest growing telecom, insurance and financial service markets in the world”. India’s strengths in information technology and biotechnology are well known. Its laws are transparent, judicial system impartial and “our markets and our skilled workforce continue to grow,” Vajpayee said.