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Sinha clarifies Insurance Bill will be introduced; Kumaramangalam says passage unlikely

Finance Minister Yashwant Sinha today said the government would not retrace its steps on insurance reform and would do its best to have the bill passed in the current session of Parliament.

''Let me assure you that there is absolutely no desire on the part of the government to retrace its steps. We have taken a decision. We will abide by the decision,'' Sinha told the 1998 India Economic Summit in New Delhi, being organised by the World Economic Forum and the Confederation of Indian Industry.

''We will do our best given the constraints of parliamentary democracy to see the bill is not only introduced but also passed during this session of Parliament,'' he said.

Earlier, Parliamentary Affairs Minister Madan Lal Khurana said the insurance bill was not on the priority list of the current session of Parliament.

Clarifying this, Sinha said what Khurana meant was that the bill was not being introduced this week.

The bill seeks to provide 40 per cent foreign equity participation in the insurance sector.

Power Minister Rangarajan Kumaramangalam said the bill would be introduced in the winter session but was unlikely to be passed.

It would only be introduced and then would be sent to the standing committee, Kumaramangalam told reporters on the sidelines of the summit.

The defeat of the Bharatiya Janata Party in the just-concluded assembly elections had put a question mark on the government's ability to push through ambitious economic reform bills in the three-week winter session of Parliament that began on Monday.

India was ''a good, safe and stable destination'' for foreign investment and the policy of economic reforms could only go forward, Sinha said.

While it was correct that infrastructure was a priority area for foreign direct investment, good foreign investment would be welcome in other areas as well.

The size of the Indian market itself put the country apart from others as a prime destination for private investment.

Answering a question which raised doubts that India would be able to keep the fiscal deficit at the level of 5.6 per cent of the GDP in the current fiscal, Sinha said: ''How do you know what steps I have in mind?''

He said every hour, every minute and every second the question of fiscal deficit was predominant on his mind. He would embrace all steps to peg it at the targeted level.

He said in his budget speech he had devoted paragraphs to housing which was a high priority of his government. He had also announced several concessions to give a boost to this sector but much more needed to be done.

Only yesterday he had asked the housing conference to give its recommendations which he would in right earnest consider with a view to implementing them.

Sinha said what has been easy to implement was done in the last seven years while the unfinished agenda was more difficult. Among the courageous decisions taken by his government was the one relating to closing down of sick public sector undertakings and in disinvesting up to 74 per cent of non-strategic psus which was unthinkable some years ago.

Legislative action was now called for in implementing many of these decisions, Sinha said adding that he was hopeful that the decision to abolish the Urban Land Ceiling Act would see the light of the day before the end of the Parliament session.

He said the government was clear that investors had to be made to feel secure and should be assured reasonable profits.

There was a time when there was extreme pressure for moving towards capital account convertibility. However, international perceptions changed and India is now being complimented for following a cautious policy.

''If one is cautious on money inflows then, outflows will also be cautious,'' Sinha said.

He reiterated that India had never defaulted on a single external commitment. With current account convertibility, freedom had been established in the financial sector.

The growth rate of the economy is to be either 4.5 per cent or 6.5 per cent but surely it will not record negative growth as was the case with many east Asian countries.

Sinha said every country should have its own level of economic reforms taking into account the total picture and its problems.

The totality of concern of India is its huge population and its quality of life rather than investment alone. ''There has to be a balanced approach with focus on all sectors be it agriculture, rural development or foreign investment.''

UNI

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