The Indian government is working to make Mumbai a regional financial centre to provide financial services to national, regional and global customers, Finance Minister P Chidambaram said in New York on Thursday.
Chidambaram delivered the keynote address at Asia Society's second annual conference on India's financial markets.
"We believe Mumbai is ideally located to acquire the status of an international financial centre and we are working towards that end," Chidambaram said. An expert committee is looking into the matter and it will submit its report by the end of November.
"We will then take steps to make Mumbai an international financial centre," Chidambaram said. "When that is done, we believe that international financial services to national, regional and global customers can be provided from the city," he added.
Addressing the 100-odd top-notch executives representing investment, banking and other communities, the finance minister said that it is not possible for India to sustain a growth rate of 8 or 9 per cent without major reforms in the financial sector.
Noting that reform of the financial sector tops the agenda, Chidambaram said that the government has important legislation to pass on this. For, all government plans depend heavily on it. This factor has been stressed by Prime Minister Manmohan Singh thrice in the past three weeks.
"The growth that we have achieved over last the three years, the kind of confidence that we have infused into the Indian system, the polity as well as economy, and the pride with which Indians walk today will give us the necessary political and legislative support to pass these bills and make India's financial sector one of the strongest in the world," Chidambaram said.
The government, he said, is all set to come up with major reforms in banking, insurance and the pension sectors so that savings can be mobilised and allocated to productive activities.
The government is nearly done with the drafting of a bill on a comprehensive set of laws to amend the insurance laws, which will be introduced in the winter session of Parliament beginning end of November, he said.
One of the clauses in that bill proposes that the current cap of 26 per cent of foreign ownership in insurance companies be raised to 49 per cent, the finance minister added.
"While I am confident that the bill will pass, I cannot say with certainty that the clause lifting the cap will go smooth. We are going to give our best. We are engaged in discussions with our coalition partners and other parties in Parliament."
"I am confident that when insurance laws are amended, many more players will be allowed into the sector," he said.
The reforms of banking, insurance and pension would put in place a new architecture for the financial sector, Chidambaram said. "We have much to do and we have miles to go before we rest."
Among others who addressed the meeting included Deputy Chairman of the Planning Commission Montek Singh Ahluwalia, US Ambassador to India David Mulford, Ambassador Ronen Sen, Chairman of JP Morgan Chase board William B Harrison and co-chairman of US-India CEO Forum Charles Kaye, Co-President Warburg Pincus.
