Finance Minister Jaswant Singh has indeed walked his talk on the several initiatives announced in the Budget for 2003-04 for India Inc, the taxpayers and the financial markets.

Besides, he has embarked on a bold debt restructuring exercise to reduce the country's interest burden, which amounted to 28 per cent of the total government expenditure in the last fiscal.

• The finance minister's progress report

To ensure tax compliance by the textiles sector, Singh cut excise duties but simultaneously completed the Cenvat chain too.

And along with the textiles ministry, he is close to finalising a debt restructuring package for the sector by agreeing to provide it budgetary support such that the interest rates on past debt is cut to 8-9 per cent from the present average cost of 16 per cent.

While he did take advantage of the soft interest rate regime to retire a part of the government's high cost domestic debt (Rs 14,438 crore ), he has paid little attention to prune the huge subsidy bill of the government.

In the current fiscal, subsidies are budgeted at almost Rs 50,000 crore accounting for over 11 per cent of the Centre's total spend.

Senior finance ministry officials, however, said that a draft for a national policy on subsidies has already been prepared.

The policy will be in the nature of an approach paper which will suggest measures to gradually phase out food, fertiliser and petroleum subsidies. The ministry will place the approach paper before the union cabinet shortly, they said.

On the external debt front, the ministry plans to go through India's entire portfolio of overseas loans with a fine toothcomb.

After pre-payment of about $ 3 billion of high cost World Bank and ADB loans last fiscal, the Centre again plans to pre-pay currency pool loans of the World Bank which carry an interest rate of 5 per cent and above.

"Whether the Centre will raise funds from the domestic market or opt for a sovereign borrowing to pre-pay more external debt is being deliberated upon," said a senior official.

Emboldened by burgeoning forex reserves which are over $ 83 billion now and provide an import cover of 15 months, Singh intends to be liberal on the external account by devising ways to create more demand for dollars.

He has discouraged corporates to tap the external commercial borrowings market and simultaneously allowed ECB prepayment of over $ 100 million under the automatic route.

Singh's sops for the capital markets like doing away with long-term capital gains tax for stocks being bought in the current fiscal and shifting the incidence of dividend distribution tax to companies from shareholders has already seen the Sensex piercing the 3,600 mark.

What has been pending for the last two years was a defined contributory pension regime for government employees.

Officials said a Cabinet note was ready and the scheme would be cleared soon along with an executive order for the appointment of a pension fund regulator.

Implementation of a pan-India value added tax regime too has missed the bus, for which the finance ministry would blame the lack of interest by states.