Thaindian News

New Delhi, July 13 (IANS) With Prime Minister Manmohan Singh himself indicating that Tuesday’s cabinet reshuffle would be the last for the current government, industry now hopes the ministers — new and old — will settle down fast to push key economic legislation and reforms that appeared to have been put on the back burner.

“I think that (giving a push to reforms) is the intention of the prime minister,” Rajiv Kumar, secretary general of the Federation of Indian Chambers of Commerce and Industry (FICCI), told IANS.

Kumar said the government must push the reform process to maintain the growth momentum. “There is a slowdown in industrial growth and investment. Economic reforms are needed to reverse the trend.”

“Reforms in insurance, banking, pensions, taxation and land acquision - each of them are important and needed to be pushed,” said Kumar.

Industrial growth fell to a nine-month low of 5.6 percent in May. Foreign direct investment (FDI) to India fell by 25 percent to $19.42 billion in 2010-11 against $25.83 billion in the previous year and $27.33 billion in 2008-09.

On the need for a further reshuffle, the FICCI secretary general said the telecom and human resource development ministries should not be held by the same person as both needed special attention.

Kapil Sibal continues to hold two important portfolios of human resource development and communication and information technology.

“Education needs a lot of attention. Telecom is also important. One person can’t give adequate attention to both these ministries,” Kumar said.

Talking to IANS, Confederation of Indian Industry (CII) director general Chandrajit Banerjee said there were some positive signals from the reshuffle but the real test would be whether the new team is able to give the much needed push to the reforms process.

“Reforms have to be pushed to keep the growth momentum. There is no alternative,” said Banerjee, adding that industry was hopeful that some key economic legislation would be introduced in the monsoon session of parliament beginning August 1.

“We see the reshuffle a move towards task orientation,” he said.

Referring to the industry lobby’s meeting with Commerce and Industry Minister Anand Sharma, Banerjee said the government has given an assurance to listen to industry concerns and push the reform process, especially on the manufacturing policy and allowing FDI in multi-brand retail. Sharma was given additional charge of textiles in Tuesday’s reshuffle.

“Government realises the need for stronger interaction with industry. They have started the process. I think it is a great thing,” the CII director general said.

Prime Minister Manmohan Singh inducted eight new faces and dropped seven in his much-hyped cabinet reshuffle Tuesday. However, most economic portfolios have been left unchanged including those of finance, telecom, commerce, heavy industries, power, civil aviation, small enterprises, renewal energy, petroleum, road transport, shipping and coal.

The prime minister had tried to give a facelift to his cabinet to fight off high profile corruption scandals. Key economic reforms, including a direct tax code, a goods and services tax, a banking laws amendment bill, reforms in the pension and insurance sectors and new policies on manufacturing, mining and land acquisition are pending as Manmohan Singh’s government, in its second term, has made little headway on key policy decisions.

“Both banking and insurance are capital starved industries. Reforms, especially allowing more foreign investment, would give a much needed push to the industry,” said Monish Shah, director at Deloitte India.

Shah said the proposed reforms in the banking and insurance sectors would be a game changer as they would bring fresh competition and new capital to the industry.

(Gyanendra Kumar Keshri can be reached at gyanendra.k@ians.in)