***** Wednesday, 8 August, 2001, 16:34 GMT 17:34 UK Rural India questions reform benefits
...There remain about 50 million families classified as "rural poor", even as the Indian economy continues to grow at about 5% a year.
"One thing which is clear is that there is a sharp decrease in the government's expenditure in rural areas, taking both agricultural and rural development outlay together," Prabhat Patnaik, professor of economics at the Jawa-harlal Nehru University in Delhi told BBC's World Business Report.
Taken as a share of gross domestic product, spending in rural areas has fallen steadily during the 1990s, he says.
"It is now an extremely small figure, about 2%," he added....
Other fears exist that India's rural poor will be hit hard by reform.
Earlier this year, Indian prime minister Atal Behari Vajpayee defended his economic reform programme, saying that the liberalisation of imports would not hurt farmers.
It was also feared that the government's decision to comply with World Trade Organisation (WTO) import guidelines could hit farmers hard.
Slow reform?
However, even as people in India fear the impact of the reform, other analysts question whether the pace of reform is moving fast enough.
On Tuesday, international credit rating agency Standard and Poor's questioned whether the pace of reform was moving fast enough.
It downgraded its outlook on the country's debt, raising questions about India's creditworthiness.
"The country's political leadership, cutting across all parties, remains reluctant to forego patronage opportunities that arise from a bloated public sector, undermining the credibility of India's beleaguered privatisation programme," the Standard and Poor's report said....
<http://news.bbc.co.uk/2/hi/business/1480651.stm> ***** -- Yoshie
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