The Finance Minister Mr P Chidambaram said that there were two areas where the performance of his government was below expectation. One was its inability so far to push forward further reforms in the financial sector, especially in banking, insurance and pensions.
But he remained hopeful that these reforms would take place in the remaining tenure of this government. Second, he said that the systems for the delivery of social security programs had not improved.
Although the government has considerably increased the outlays on these programmes, this has not yet translated into better outcomes. The rigidity of the bureaucracy remains a hurdle in achieving more inclusive growth.
He was addressing a luncheon session on “The Shifting Power Equation,” at the India Economic Summit 2007, organized by the Confederation of Indian Industry (CII) and the World Economic Forum.
Mr Chidambaram expressed happiness over the growth of Indian companies, both organically and inorganically, and called for creating a competitive environment to promote entrepreneurial skills in the country.
On the general perception that the global economic power center is shifting to developing countries, Mr Chidambaram said that although economic growth is being driven by the developing world, economic power still resides with the developed world.
India and China now contribute 60% of the world's economic growth. However, the key factors that drive economic power are knowledge, financial resources and material resources such as oil and gas. And as long as the developed nations have control over these, they will have an edge over developing nations.
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