'NPAs to be curbed, new FDI policy on the anvil'
Prime Minister Atal Bihari Vajpayee has said that his government will continue with financial sector reforms to minimise the non-performing assets, besides making India a more hospitable and competitive destination for foreign direct investment.
Vajpayee said the Reserve Bank of India is willing to consider further expansion of foreign private banks in the country. The United States and India have decided to modify the double taxation treaty in order to eliminate some of the tax irritants, he added while addressing the US-India Business Summit in Washington.
"India needs large flows of capital and technology to achieve the required growth targets. Therefore, the thrust of our policy will be 'automaticity', transparency, simplicity, speed and removal of conditionalities," Vajpayee said at the summit organised by the National Association of Manufacturers and the Confederation of Indian Industry.
Vajpayee said that the government is confronting problems concerning fiscal rectitude. However, he said, ''We are determined to ensure that the reforms benefit the average man.''
On the insurance sector, he said that the insurance regulatory authority will issue the first batch of private licenses by October 1.
The prime minister also said that a tax reforms commission will be constituted to lay down the roadmap of further tax reforms.
Vajpayee said the divestment and privatisation programme of a large number of public corporations and selected utilities is moving ahead with speed.
On Air-India's divestment, he said that it is well on course. The necessary advertisement in this regard will be issued in a fortnight. Also, milestones have been determined for long-term lease of five major international airports, he added.
He said the corporatisation of ports and private participation in port building is being aggressively pursued.
A new civil aviation policy, based on the principle of making India an easier destination, is also on the anvil. "It would not be driven by a mere bilateral consideration of trade-off in slot sharing. I am sure that this will enable American and other foreign airlines to bring more flights and business to India," Vajpayee said.
He said reforms in the power sector would be expedited. ''We now have a regulatory framework that depoliticises the fixation of tariffs. This has been emulated by 14 state governments. Financial institutions have worked out alternative arrangements that will enable them to lend more easily.''
Towards the end of his speech, Vajpayee remarked, ''Distinguished businessmen, corporate America has reaped the rewards of a record ninth year of domestic economic expansion. Today, I invite you, captains of US industry, to grasp the many new opportunities India offers. Your choice is diverse. It ranges from infrastructure to manufacturing, from financial services to knowledge-based enterprises. Let us forge a new economic partnership. A partnership reinforced by a common desire to derive mutual benefit.''