Why India's PM Singh pledging sharper attack on corruption
Indian Prime Minister Manmohan Singh has been under political pressure to address corruption more directly. New data indicate that corruption concerns are affecting both foreign and domestic investment decisions.
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Offering his personal views via e-mail, ValueNotes project manager Arjun Bhuwalka says that “although the Investment Confidence Index improved marginally in December 2010 reflecting moderate optimism among the Indian financial community, surprisingly the outlook on the Indian economy has sobered. Corruption may not be the key factor but it is a growing concern [and] if not corrected [it] can have a far reaching impact on domestic and international confidence towards investing in India.”Skip to next paragraph
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In the previous three quarters, corruption did not show up in the top three concerns in the quarterly survey.
“Worries over the global economy recede, while domestic worries re-surface; corruption joins inflation in killing confidence in India,” the report summarizes. Mr. Bhuwalka cautions that the survey does not correlate investor decisions and corruption, but just flags it as a rising concern among investors.
In his press conference, the prime minister both praised and chastised the media for their dogged focus on corruption, suggesting that too much coverage may be distorting India’s image.
For many years, Singh enjoyed an almost George Washington-like reputation for personal integrity. While the scandals have so far not involved him personally, his sluggish handling of his underlings’ misdeeds have tarnished his image.
In a sign of how far he’s fallen, a reporter asked him directly if he ever considered resigning.
“I have a job to do,” Singh said. “I have never thought in terms of giving up.”
Beyond the corruption headlines, India signed a free trade agreement with Japan. The two countries promised to remove tariffs on 94 percent of bilateral trade within a decade.
As part of India’s “Look East” policy that puts economic and diplomatic focus on East Asia, New Delhi has signed similar free trade deals with Singapore and South Korea, and inked other trade deals with Indonesia and the Southeast Asian grouping ASEAN.
Leaders from the US, China, Britain, and France, among others, have also come to New Delhi in the past couple of years looking for trade deals, signaling the importance of the country’s vast middle class and nearly double-digit GDP growth.