Govt keen on speeding up reforms: Chidambaram to India Inc

Finance Minister P Chidambaram Wednesday informed India Inc that the government is keen on speeding up reforms and hoped legislation for raising FDI in insurance sector will be passed in the Winter Session of Parliament.

New Delhi: Finance Minister P Chidambaram Wednesday informed India Inc that the government is keen on speeding up reforms and hoped legislation for raising FDI in insurance sector will be passed in the Winter Session of Parliament.

"The Finance Minister...Absolutely would like to see them (the key economic reform) happen and is looking for all us to work together...," FICCI Senior Vice-President Naina Lal Kidwai told reporters after the meeting.

Chidambaram, who had invited representatives of CII, Ficci and Assocham, held a two-hour meeting with them.

Kidwai said the industry too wants the key economic Bills for raising ceiling of FDI in insurance sector, opening pension sector for FDI and amendment to banking laws to be tabled in Parliament should be passed at the earliest.

Kris Gopalakrishnan, President designate of CII, said the industry leaders discussed about infrastructure, IT and banking and finance beside other issues.

Assocham President Rajkumar N Dhoot said that Chidambaram stressed on the importance of passage of the three Bills in the forthcoming session of Parliament.

Sources, meanwhile, said the Union Cabinet is likely to take up the insurance and pension Bills on Thursday.

"We think the Minister (Chidambaram) will give many things to attract foreign investments in India," Assocham President Rajkumar N Dhoot said.

FICCI President R V Kanoria said while listening to the view points of the industry, the Finance Minister had an open approach.

"I think this government will be focused on decisions for growth and investment," he said, adding the minister wants consumers should get benefit of economic growth and employment opportunities are generated.

While welcoming the recent policy initiatives, CII President Adi Godrej said "there is a lot to be done for the economy and industry at the present moment".

Gopalakrishnan also said industry will support implementation of Shome Committee report on taxation issues and of Kelkar panel's recommendation on fiscal consolidation.

FICCI urged the Finance Minister to take urgent steps to remove project-related risks such as non-availability of environmental, forest and other ground level clearances to kick start infrastructure projects and improve investor confidence.

During the meeting, the issue of high interest rates too came up for discussions, Kanoria said.

"This is the festival season and this is time when Indian consumer spent most of the money and this is a time to cut interest rate by 100 basis points," he said.

Assocham pitched for withdrawal of General Anti-Avoidance Rules (GAAR) and doing away with provisions of retrospective effect to tax laws.

Besides other issues, matters related with infrastructure and its financing were important aspects of the meeting, Kidwai added.

"We got into details of what aspects of infrastructure need to be sorted out... The problem today is not lack of finance. The problem is that the finance is stuck in the projects that are stuck. Banks are hesitating to go for the next project," she said.

Kidwai further said, "He (Chidambaram) basically asked that industry to work with government. He is not obviously happy with the fact that industry speaks against government."

She added the Minister wanted the government and industry to work together to resolve issues which have common interest.

Industry also highlighted the importance of tax reforms, including the implementation of the proposed Goods and Services Tax (GST) regime at the earliest.

CII said Public Sector Units (PSUs) are sitting on huge cash-pile and their free cash flows of listed PSUs alone are Rs 41,500 crore.

"They must be encouraged to either use cash directly to build new capacity or increase dividend payouts so that the government can spend the money on new projects," Goderj said.

The India Inc also demanded that flagship schemes such as Bharat Nirman and JNNURM should be given priority.

Industry further suggested that exporters should be allowed to raise fund from overseas through the ECB route.

On the Land Bill, it said the industry was willing to accept market determined rates for acquisition of land for industrial purposes.

While welcoming the decision to allow FDI in multi-brand retail, FICCI President Kanoria said it was important that enabling environment is created for the large companies to invest in backward linkages and supply chain infrastructure.