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Sinha assures Phase II of reforms on return to power

R C Murthy in Washington

The agenda for the first three weeks of the next finance minister, if the National Democratic Alliance returns to power in October, is to pass the pending bills constituting the Insurance Regulatory Authority and 14 other pieces of "progressive" legislation.

Finance Minister Yashwant Sinha told businessmen at the Confederation of Indian Industry meet in Washington that it would be his endeavour to push through the Foreign Exchange Management Bill to replace the Foreign Exchange Regulation Act and "a slew of legislations" to usher in the second phase of economic and financial reforms.

Sinha said his government would eliminate multi levels of official clearances for industrial investment and have a single-point approval and move towards automatic approval.

In the next millineum, the type of industries that would come up were technology-oriented. His goal was to create a new India rid of poverty by 2020.

Later, Sinha expressed happpiness at the international community finding the required resources for heavily indebted poor countries (HIPC-II) debt initiative and said the question of a hike in the World Bank's lending rates not arise now.

But India was concerned at the intrusive stance of the multilaterals and developed countries.

The US Treasury Secretary Laurence Summers said his country believed it was incumbent on these institutions to be fully knowledgeable of the audit and accountability systems in place for military expenditure prior to extending assistance.

That was necessary, according to Summers, to ensure that assistance was supplementing a country's own best efforts to reduce poverty and pursue equitable economic growth, rather than simply making it easier for the country to engage in, what he called, excessive military spending.

These interventions would be also in the form of anti-corruption safeguards on aid packages from the institutions. The US wanted these organisations to undertake the fundamental internal policy and process changes needed to enable them to sharpen their focus on achieving verifiable progress on poverty reduction.

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