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India to continue with reforms: Sinha

Finance Minister Yashwant Sinha has expressed determination to continue with the economic reforms and pay special attention to areas, including power sector, in which they have made less impact.

Speaking extempore before a gathering of US business representatives and investors on Thursday, Sinha described the progress of reforms in the power sector as disappointing and conceded much more needs to be done in this area to attract investment.

"Much has been achieved in the first phase of reforms and India has traversed a long distance on this road," he said.

During his 30-minute presentation, Sinha gave details of the first generation reforms, what had been achieved and spoke about the challenges ahead.

The FM said urgent attention is being paid to keep the fiscal deficit under control.

He cited the opening up of the insurance sector as a major achievement. "The opening up of this sector effectively concluded the first generation of reforms," Sinha said adding, the government would continue with second-generation reforms.

"Another sector in which reforms have seen a great degree of success is telecommunications," he said, noting that the consumer has benefited from the increased competition that resulted in lower rates.

About the emphasis India is laying on developing a country-wide network of highways for better transportation, Sinha said, "Roads is one sector in which reforms have gone relatively unnoticed".

"By imposing a cess on petrol and diesel, the government has been able to collect seed money required to raise international finance for this sector," he told investors.

The money is being utilised for developing national highways and about 6,000 km of the North-South and East-West corridors have already been sanctioned under the scheme, he said.

Referring to privatisation, Sinha said, "The programme is progressing well. Videsh Sanchar Nigam and IBP Ltd would be privatised by March 31".

Privatisation of several other companies, including Air-India and Shipping Corporation of India, is on the anvil, he said.

However, he said there was a need to set new rules for privatisation. "When the government withdraws from certain areas, it would not allow a free-for-all."

"The government would set up independent regulatory authorities such a Telecom Regulatory Authority of India and the Insurance Regulatory and Development Authority to act as arbiter and umpires for this sector," Sinha said.

Later, the FM participated in a panel discussion on "Global action to bridge cultural and social divides" at a closed-door meeting organised by the World Economic Forum.

Confederation of Indian Industry president Sanjiv Goenka hoped that the current year would witness a stronger economic growth and the reform process would gather greater momentum.

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