India\\\'s finance minister says economic reforms will be ‘long journey’

NEW DELHI, Nov 5 (Reuters): India's Finance Minister Arun Jaitley said on Wednesday structural reforms to Asia's third largest economy could only progress slowly, adding that he backed relaxing labour and land laws hated by business, along with more privatizations.

Speaking to an audience of foreign investors, Jaitley said people still needed to be convinced that making it easier to hire and fire workers would create jobs. He did not set deadlines -- possibly disappointing some in the audience at the Indian edition of the World Economic Forum hoping for a quick reform burst.

"There is a lot that has to be done ... I am quite satisfied with the beginning we have made but it's a long journey," Jaitley said.

He cautioned against rushing into big bang reforms that could trigger a political backlash and derail the government's agenda.

"Reform is the art of the possible," he said, while promising not to take decisions that would send negative signals to investors.

Prime Minister Narendra Modi came to office in May with a mandate to create jobs and kickstart Asia's third largest economy after a long period of low growth. Expectations are mounting that the government will take steps between now and the budget in February to stimulate investment.

India recorded better-than-expected growth of 5.7 per cent in the quarter ending in June, but industrial output and investment has not yet picked up in a sustained way.

The government has already taken some steps to make doing business easier and reduce red tape and subsidies. However, Modi has not moved ahead as fast on privatizations or welfare and tax reform as some of his supporter had hoped.

Anand Mahindra, managing director of tractors to tech conglomerate Mahindra Group, said that investment in the economy would pick up once companies saw big infrastructure projects restart. "It takes a little while to gather momentum, and the momentum I sense is very positive," he told reporters.

"When you get backhoe loaders out there digging up earth again visibly, you will see a rush of investment," said Mahindra, whose company also makes backhoe loaders.

A land acquisition law passed by the last government and supported by Modi's party while in opposition dramatically increased compensation to farmers for land. Stringent rules requiring consensus among sellers have made it difficult for industry to buy land.