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"I have sincere reservations on how these measures which have been announced can actually impact growth," said Mumbai-based economist Jay Shankar. "You will have to wait two or three years to see investment coming in." In the meantime, he said the government urgently needs to push through delayed tax reforms that would create a unified, national system of taxation, ending the jumble of conflicting state tax codes. "It would be the equivalent of a free trade agreement within the states, so you have free movement of goods and services within the country," he said. "That will push up the growth rate of the economy by more than one percentage point minimum." For India to escape the trap of slow growth and high inflation, the government is also going to have to kick-start the investment cycle, by speeding up tens of billions of dollars of planned investment in roads, bridges, ports and oil and gas, he said. "The private sector will not be willing to take that extra leap forward to start investing," he said. "You will have to incorporate the role of public sector undertakings in promoting that initial catalyst." The government revised July inflation up to 7.5 percent, from its earlier estimate of 6.9 percent. Inflation was 7.6 percent in August. September's inflation is the highest for India since last November, according to financial information provider FactSet.
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