PM hints at liberalisation of FDI regime

Expressing commitment to continue with reforms, Prime Minister Manmohan Singh on Wednesday indicated government will further liberalise FDI regime in the coming months and push the land reforms measures.

"The liberalisation of FDI in multi-brand retail, civil aviation and other areas, are important signals.

"We are reviewing the FDI policy comprehensively to see what more can be done in the coming months," he said at the Confederation of Indian Industry annual meet.

The private sector, the Prime Minister said, needs an environment in which enterprise can flourish and create both jobs and stimulate growth to ensure that it remains inclusive.

"The environment today is not what it should be, and that is what the Government must correct," Singh said adding that more reforms are being considered by the government.

Meanwhile, talking to reporters, Commerce and Industry Minister Anand Sharma said that further liberalisation of foreign investment norms could include raising FDI cap in sectors like insurance, banking and defence in a "calibrated and incremental" manner.

Elaborating on other reform measures being contemplated by the government, the Prime Minister said "the Land Acquisition and Rehabilitation and Resettlement Bill has been cleared by the Cabinet and will soon go to Parliament".

The long awaited land bill seeks to address problems of the industry with regards to acquisition of land for setting up green field projects.

On the Financial Sector Legislative Reforms Committee recommendations, he said, they were being "carefully considered" by the government.

Headed by Justice (retd) B N Srikrishna,

the FSLRC, among other things, has recommended setting up of a unified financial agency as an arching regulator after amalgamation of Securities and Exchange Board of India, Insurance Regulatory and Development Authority, Pension Fund Regulatory and Development Authority and Forward Markets Commission.

Satisfied with the functioning of the newly constituted Cabinet Committee on Investment which was set up to accord fast track regulatory clearances to mega projects, the Prime Minister said he hoped the panel would clear additional 31 oil blocks within next two weeks.

"I am encouraged by the progress that we have made in the last three months by the work of this committee," he said, adding that in the petroleum sector, investment has been approved in five blocks by the CCI.

Investments worth $20 billion for exploration and production activities in 40 oil blocks had been held up for many years because of lack of security clearances.

Singh further said the CCI has also streamlined the processes of granting environment and forest clearances for mega projects and that clearances for 12 coal mining projects have been fast tracked.

These projects would add 37 million tonnes to India's annual coal production.

The Prime Minister said that the problem of fuel supply -- both in coal and gas -- to power projects has been ‘posing problems’.

"The ministries are working to reach a resolution of these problems in a time-bound manner. I hope we will see results in the next three weeks," he added. Singh, who briefly outlined the ‘many areas’ where government is taking steps to revive the economy, urged the Indian industry to "have faith in our determination and avoid getting swamped by a mood of negativism".