New Delhi, July 2 (IANS) After the high growth cycle that followed the economic reforms of 1990s, India should now bring in sweeping changes in its investment climate for the next stage of growth, the Economic Survey for 2008-09 released here Thursday said.
“The reforms of the 1990s created a competitive environment in which Indian entrepreneurship could flourish. However, there is a perception among financial and other investors that the government has been slow on policy reforms,” the survey, tabled by Finance Minister Pranab Mukherjee in parliament, stated.

“An economy where the industrial growth has been steadily declining for nearly eight quarters over 2007-08 and 2008-09 and with the revival still uncertain, policy interventions are necessary,” it said.

The survey advocated for raising the foreign investment cap in the insurance sector to 100 percent in a special category of companies that provide “all types” of insurance services to rural residents, including agriculture related activities.

It further called for raising the foreign direct investment (FDI) cap to 49 percent across the board in the insurance sector.

Currently, only 26 percent FDI is allowed in insurance companies.

The survey also favoured upping the FDI limit in the defence sector from 26 to 49 percent and to 100 percent in “high technology, strategic defence goods, services and systems that can help eliminate import dependencies”.

Among other reforms, the survey called for new bankruptcy law to ensure speedy and effective bankruptcy, open access to local loop for providing broadband connectivity in rural areas, a single regulatory body for all means of transport including highways, railways, airports and ports, and limiting price control in pharma to only essential drugs.