Finance Minister P Chidambaram on Friday said India needs to open up sectors such as mining and transport for private investment, particularly for foreign investors.
In mining and transport, the dominance of government is so large that these can be described as "unfree", Chidambaram said addressing the alumni of Wharton University of Pennsylvania in Mumbai.
He said India must open up the economy quickly, as the first 30 years after independence were years of lost opportunity. The year 1991 was an inflection point in the history of India and 2006 could be a similar point provided "hard decisions" were taken, he said.
The finance minister listed several hard decisions taken by the United Progressive Alliance government in the last 20 months.
These include reforms in the banking sector (with some bills pending in Parliament), decision to increase foreign participation in insurance sector, decision to divest all but eight public sector undertakings, decision to open up coal mines and the liberalisation of foreign direct investment norms in general.
"If we take (some more) hard decisions and achieve 8 per cent GDP growth, 2006 will be considered 10 years from now as another inflection point in the history of India," Chidambaram said.
He said that taking hard decisions is difficult when a political coalition is ruling as the electorate throws up completely unexpected results. There has been no single party rule in India since 1984 and political parties are obliged to put together a coalition.
"In a coalition, decision making process is extremely painful. We not only have build a consensus among all partners, but also with affiliated organisations such as trade unions. The country has incurred huge costs because of this and lost valuable time. Something which should have been done four years ago is being done today," he said.
Later in the evening, delivering the keynote address at Zee Business' first anniversary function, Chidambaram called upon the people to 'be good project implementers and adhere to a timeline and cost estimate."
This year, he said, "We should see a burst of investment activities, mergers, acquisitions and the bankers would be kept busy."
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