US pat for reform: ‘Good to see so much change in air’

Saying that it is "good to see so much change in the air", US Treasury Secretary Timothy Geithner Tuesday backed the UPA government's fresh spell of economic reform as they offer a "very promising path" to boost the growth of the Indian economy. He said Washington feels encouraged by the initiatives taken by the Indian government on how to generate more confidence and get more investments, barely six months after flagging his concerns over India's tax policies.

The recent capital market reforms in India "offer huge investment opportunities for US businesses and investors", India and the US said in a joint statement even as Fed Reserve chairman Ben Bernanke sought to reassure New Delhi that the third round of quantitative easing by the US Federal Reserve will not harden global commodity prices.

Geithner and Bernanke are on a two-day visit to India to participate in the third meeting of the Indo-US Economic and Financial Partnership.

They held talks with Finance Minister P Chidambaram, Reserve Bank of India Governor D Subbarao, deputy governor Subir Gokarn and top finance ministry officials.

"The reforms outlined by the government of India offer a very promising path to improving growth outcomes for the Indian economy," Geithner said at a joint press conference, adding that they would lay the foundation for improving investments in the economy. The US Treasury Secretary had in April raised concerns with then finance minister Pranab Mukherjee over budget proposals for retrospective tax amendments.

"I raised the concern that it may impact commodity prices and commodity prices may rise," Chidambaram said referring to the possible impact of QE3. "But (they) pointed out that there has been no impact yet on commodity prices. There's also a beneficial side - if the US economy grows, it will help us in our exports, it helps us in attracting more capital inflows".

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