Notwithstanding the logjam in Parliament, Finance Minister P Chidambaram on Friday exuded confidence that the government would be able to move ahead with the proposal to raise the Foreign Direct Investment (FDI) cap in insurance and pension sectors.
In his address at a seminar at the 46th ADB conference, he assured delegates that the country's economic growth rate would accelerate to over 8 per cent in the next three years, from about 5 per cent during 2012-13.
"FDI regime in areas like multi/single brand retail, airlines etc. have been further liberalised and I am confident there will be forward movement in areas like insurance and pensions," Chidambaram said.
The Insurance Amendment Bill to raise FDI cap in the insurance sector from 26 per cent to 49 per cent has been pending in the Rajya Sabha since 2008. Parliament has not been able to function properly with the Opposition raising the issue of coal and other scams and disrupting the sittings.
As regards the economic growth, Chidambaram said, "between 2004 and 2008 we grew at an average of 8.5 per cent. We have slipped in the last couple of years. Why should not we climb back to 8 (per cent)? I am giving myself three years to get back to that."
Referring to other reforms initiatives, the minister said that an independent regulatory authority would be announced shortly for the road sector and coal sector and for tariff setting in the Railways.
Chidambaram further said the government would be addressing the issues related with shortage of coal.
On the fiscal deficit, Chidambaram exuded confidence that the government will be able to reduce it to 3 per cent of GDP by 2016-17.
"Our fiscal deficit in 2012-13 is estimated at 5.2 per cent. We may better this target. The Budget 2013-14 estimates a fiscal deficit of 4.8 per cent at the end of the financial year. I am confident that this will steadily reduce to 3 per cent or even less by 2016-17," he said.
Chidambaram added however: "Let me stress that our fiscal consolidation has a human face and the government will continue to provide support for the poor and the needy."
The minister said that steps have been taken to address Current Account Deficit (CAD) by moderating gold demand through higher import duties.
CAD, which is the difference between the inflow and outflow of foreign currency, had touched a record high of 6.7 per cent in the October-December quarter. It is likely to be around 5 per cent of the GDP for the entire 2012-13 fiscal.
On the steps taken by the government to clear bottlenecks blocking the implementation of large projects, Chidambaram said the government has set up a Cabinet Committee on Investment (CCI) and it has already cleared investments to the tune of USD 27 billion.
On the measures taken to reduce food inflation, the minister said efforts are being made towards higher production of protein foods, improving supply chain logistics for better procurement, and processing and distribution of agri produce that would potentially reduce wastage.