India needs to keep momentum for economic reforms going and try to boost growth if it is to come to grips with huge problems of poverty and joblessness, US Treasury Secretary John Snow said on Thursday.
In prepared remarks for a keynote address to US and Indian business leaders near the end of a four-day visit, Snow once again urged India to permit increased foreign ownership in its financial sector and warned against becoming complacent about the need for reform.
"The pace of reforms will be decided by India's economic leaders and the demands of the global economy, but I think it's important to recognise that there are costs to going too slow," Snow said.
"With huge segments of the population unemployed, underemployed and living in poverty, more rapid growth is an imperative," the US Treasury chief said.
India's $700-billion economy has been growing at a rate of more than 6 percent on average over the past five years.
But the government estimates 260 million people - a quarter of the population - live in poverty, without safe drinking water, proper sanitation facilities or two square meals a day.
"I have heard the sentiment that so much progress has been made that now is the time to slow the pace of reforms in India," Snow said. But he noted the rate of reforms was not equal in all industries and cautioned that in that situation, "risks can develop that can threaten an economy."
In particular, Snow suggested India step up financial sector reform so investors feel more confident about directing money to India, which can then be channelled through capital markets to fund much-needed renovation of its stretched road, rail, port and civil aviation systems.