17.11.08

Modi @ the India Economic Summit


With India going all out to find capital for its liquidity-starved economy, Gujarat Chief Minister Narendra Modi cautioned the Centre against letting “dirty money” find its way into the banking and financial sector. “I have placed the issue before the prime minister as well. We must be careful and ensure that dirty money does not enter (into our country),” he said, addressing captains of industry and financial markets at the India Economic Summit . He said he was not talking about the black money, but inflow of funds from overseas sources that could be suspect. “If dirty money gets into the financial and banking sector, they will dictate for the next 10 years,” Modi said at the annual summit organised by the CII and World Economic Forum. India, like several other countries is facing a severe liquidity crunch, an issue the government is trying to address through liberalising rules for foreign fund flows via routes like the external commercial borrowing. When the stock market was booming last year, national security advisor M K Narayanan had spoken of the possibility of terror funds finding its way into the Indian financial markets. Sebi had separately banned issuance of P-Notes by FIIs to overseas investors who were otherwise not eligible to invest in the Indian markets. But this rule has since been revoked this year.

Noting that development in India needs a paradigm shift, Chief Minister Narendra Modi called for a “mass movement” to take the process forward as poverty and deprivation still remain the biggest challenge in the country. “Development needs a paradigm shift. For us in India, poverty and deprivation still remains the biggest challenge. Since the country is growing, the challenge to create conditions in which the poor can participate in the process of development is all the more important,” he said. Modi also questioned the role of institutions like the World Bank, IMF and the United Nations in the new era, emphasising on the need for a change. “It is necessary to democratise the World Bank and IMF as they do not have representatives from the developing countries,” Modi said.On the UN, Modi said it was formed to prevent wars after the World War II and has largely succeeded. “But, today, terrorism too is a proxy war and the UN is not effective in curbing this,” he said, adding that terrorism is taking a toll of developing countries and there is a need for all countries to come together on the issue. Giving the example of the backlog of cases in the courts of Gujarat, Modi said there were around 1.25 crore cases in the courts. “We took steps and talked to the judiciary to increase working hours by half-an-hour, cut short vacations and started evening courts. Today, only 22 lakh cases are pending and by 2010, we plan to bring this down to zero,” he added.

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