Industry lobby submits ‘reforms agenda’ to PM

July 23rd, 2008 - 7:15 pm ICT by IANS  

A file-photo of Manmohan Singh

New Delhi, July 23 (IANS) Industry forums Wednesday urged Prime Minister Manmohan Singh and Finance minister P. Chidambaram to accelerate reforms in insurance, nuclear energy, and civil aviation sector in a time-bound manner. Given the importance of nuclear energy, the Associated Chambers of Commerce and Industry (Assocham) advocated early formalisation of the India-US nuclear deal, the issue on which the Congress-led United Progressive Alliance (UPA) government Tuesday won the trust vote in parliament.

“The nuclear civil cooperation agreement should be pursued in a vigorous and meticulous manner so that the deal is taken to a logical conclusion as soon as possible,” said Assocham president Sajjan Jindal.

“A firm commitment to this effect should be given to the nation by Prime Minister Manmohan Singh to leave no scope for any speculations,” he said.

The industry lobby, which submitted a seven-point reform agenda to the prime minister and finance minister, also sought accelerated economic reforms in agriculture, labour, and insurance.

“At least, there should be 74 percent equity for foreign partners in insurance sector,” Jindal said, and sought amendment in the Banking Regulation Act, 1949.

Assocham also recommended opening up of the civil aviation sector with participation from overseas players in economies of scale, since economic expansion in the infrastructure sector is taking place faster.

“Civil aviation sector should be opened up and barriers lifted with new proactive approach towards this sector,” Jindal said in a statement.

Assocham sought similar reforms in pension funds, civil aviation, energy, retail and foreign investments, particularly the Press Note 1 (PN1).

PN1 is a mandatory stipulation under which foreign firms have to secure a no objection certificate (NOC) from the existing joint-venture partner along with the clearance from Foreign Investment Promotion Board (FIPB) for fresh investments in India.

Although the NOC condition is applicable only for joint ventures set up before January 2005, the industry has suggested to do away with the PN1 norm as it acts as a deterrent to foreign investments.

Jindal in a statement said the government should firm up a time-bound programme for the next nine months and re-commence reforms in the suggested areas.

He said agriculture, which logged 4.5 percent growth in 2007-08, needed focussed attention for higher yields and accordingly, farmers ought to be provided with better varieties of seeds.

“Agriculture yield can accelerate only when India gears up for another Green Revolution by applying nano and biotechnology in the farm sector,” said Jindal.

Seeking a conducive labour policy, Jindal said reforms in the labour sector were long overdue.

“Without hurting labour, the labour reforms with no hire and fire policy are possible with fresh legislations,” he said.

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