After months of dithering on the economy, India’s beleaguered government roared back to life in dramatic fashion on Friday, announcing big bang reforms as part of package of measures aimed at reviving growth and staving off a ratings downgrade.
A day after sharply increasing the price of heavily subsidized diesel, the government said it was opening up its supermarket sector to foreign chains and would allow more foreign investment in airlines and broadcasters. It also approved the sale of stakes in four state-run industries.
Facing the threat of having its credit rating downgraded to junk, the Indian government has been running out of time to show it is serious about fixing an economy that has been hard-hit by a global economic crisis and political gridlock at home.
Underscoring the need for speed, India’s inflation rate jumped to 7.55 percent in August, mainly from higher food prices, data showed on Friday.
“I believe that these steps will help strengthen our growth process and generate employment in these difficult times,” Prime Minister Manmohan Singh said via Twitter…
After months of inertia, India unveils big bang reforms