BY MUBASHRA SIDDIQUI

The India-US nuclear deal is not likely to go through under the current governing administrations of both countries, according to a leading Indian politician and Member of Parliament.

In an exclusive interview with NRI Pulse, Former External Affairs Minister and Bharatiya Janata Party (BJP) leader Yashwant Sinha said that despite the US urging India to act fast on the deal, it would not happen any time soon.
“In my opinion, the nuclear deal will not go through during the tenure of the present Indian government and the Bush administration in the US,” Sinha said.

He pointed out that while the current government could disregard the opposition it faces from his party and still go ahead with the deal, it seemed unlikely that this would occur as it is also being opposed by major factions within it.

“The new [Indian] government which takes office in May 2009 and the new US administration that comes to power in January will have to look at the deal,” Sinha said.

Sinha, who remained positive about his party’s return to power, also added, “If we are the government at that point of time, we would talk to the US administration and persuade them to confine the whole deal to civil nuclear energy cooperation…”

Sinha was in Atlanta recently and spoke at a dinner reception held in honor of him by the Georgia-Indo American Chamber of Commerce (GIACC). Also, present at the event was Banashri B. Harrison, the Minister (Commerce) at the Embassy of India, Washington.

Sinha - who has served as the Finance Minister of India – also talked briefly about the Indian economy and stated that its outlook remained positive despite a general global slowdown.

While he acknowledged the US economy as currently being in a contraction mode and agreed that it would have some adverse effects on India, he stated these would be relatively less “because of domestic growth.”

Sinha said, “Unless there is a catastrophe that cannot be predicted…the basic paradigm [to] higher growth will stay.” He elaborated that despite challenges India saw a growth rate of 8.6 per cent in the year gone by and expected to see 7.5 or 8 per cent growth rate in the current fiscal year.

“If the global situation deteriorates further, we shall see 7 per cent but this growth rate for an economy of India’s size is [still] an achievement,” Sinha said.

Sinha continued, “I am not despondent [but] rather optimistic about India. In the last 6-7 years, we have seen our domestic savings rise from 23 per cent of our GDP in 2001-2002 to over 35 per cent now… If the rate of savings increases, then investment [also] increases and that means the economy will grow by leaps and bounds.”

Sinha also noted a few other advantages India had including a spirit of avid entrepreneurship and a demographic advantage of four decades.

“The story of India is that [of] entrepreneurship,” said Sinha, pointing out that the Indian economy is often said to be on autopilot, “because the governments’ capacity to cause damage to the economy is limited.”

Sinha also spoke of the rise of the residential sector. He said that the sector’s success could be seen in the decrease in the average age of Indian homeowners - which has come down to 32 from 45 a few years ago.

According to Sinha, such major successes of the Indian economy could be attributed to liberalization and economic democracy.

Sinha said, “People have choices and that unleashing of suppressed demand of Indian people is the story of Indian success.”

He pointed out while there has been a slow down in the area recently because of political reasons, privatization has enhanced the economy. “[Even] the public sector is flourishing. It has woken up to competition,” Sinha said.

But Sinha also acknowledged that India had significant problems that needed to be addressed, one of the biggest which he said was inflation.
“The current inflation is largely because of supply side problems that need to be managed…Taxation measures have not helped. We need the government to be more liberal with their money and increase their subsidies. They need to make food cheaper in the public distribution system. I think these measures will have a salutary effect,” Sinha said.

He also spoke of the falling dollar and the appreciation of the Indian rupee which he said has adversely affected Indian exports, “It has severely impacted the textile sector. Two million jobs have been lost due to the falling dollar. The IT sector margins have also dropped.”

According to Sinha, the government should have managed foreign inflows better, “Market stabilization mechanisms don’t allow the inflow to impact the rupee so fast and so drastically.”

But, Sinha concluded, regardless of these problems and those of disease and disparity, “India is unstoppable.” Additionally, despite the nuclear deal stand-off, Sinha also stressed the need to strengthen ties between the US and India particularly in cutting edge technology such as space. “With a little imagination, India and the US could build a fruitful partnership…and there is no absence of national consensus on this. [With] cooperation [even] the sky [would] not be the limit.”

Ani Agnihotri, Founding President and Advisor at GIACC, who organized the event acknowledged the favorable response to Sinha’s talk, “[He] is a professionally educated and pragmatic leader. His knowledge and intellect is immense and India needs more leaders of his caliber.”

The Georgia Indo-American Chamber of Commerce (GIACC) is a non-profit corporation organized to develop and promote trade, business, commercial and professional relations between India and the United States, specifically Georgia.

Its services and activities build upon an extensive and developing membership network. According to Dr. Narsi Narasimhan, President of GIACC, many “Samosa and Chai” gatherings are held throughout the year as purely informal networking events.

Furthermore, the organization works to form partnerships with international Indian Chambers around the world. GIACC officials have also met with Congressman Phil Gingery for an informal briefing session. Dr. Narasimhan said the organization planned on doing more such outreach briefing sessions to get policy-makers to focus on Indo-US trade.

The GIACC also holds an annual black-tie gala banquet which has been scheduled for Sept. 20th this year. The organization is already involved a major membership drive and expects to have 800 registered members by that time.

The GIACC is located in metropolitan Atlanta, Georgia. For more information visit www.giacc.org

or call 678 230 3283