Manmohan Singh government to push unfinished reforms agenda (Lead)

July 24th, 2008 - 7:47 pm ICT by IANS  

A file-photo of P. Chidambaram

New Delhi, July 24 (IANS) With the Communists off their backs, Prime Minister Manmohan Singh’s government exuded confidence about fast-tracking key reforms in the coming months - a signal that is bound to go down well with the global business community. “We are now more confident of carrying forward our task,” Information and Broadcasting Minister Priya Ranjan Dasmunsi told reporters after a cabinet meeting presided over by the prime minister.

“We will try to accelerate the unfinished tasks,” he said in reply to a question from IANS.

Asked about the mood in the cabinet - the first after winning the trust vote in Lok Sabha, the lower house of parliament - Dasmunsi initially said it was a “normal” meeting.

But on being prodded further, he added: “It was very good. We are very happy.”

The government Tuesday won by 19 votes the trust vote that was forced by Left parties following their withdrawal of support to protest the United Progressive Alliance (UPA) government’s moves to go ahead with the India-US civilian nuclear deal.

Dasmunsi’s comments echoed the sentiments expressed a day earlier by Finance Minister P. Chidambaram, who said the government was ready to push forward some major reforms, especially in the financial sector that were so far blocked by Left parties.

Legislations to allow a hike in foreign equity in insurance firms, higher voting rights for foreign banks operating in the country and entry of private pension funds are some of the key areas of focus, he indicated.

“We will make all out efforts to take economic reform process forward by passing a number of bills pending in parliament,” Chidambaram said.

“We have absolute majority. We have to build on that and we will reach out to the parties which are not opposed to the reforms.”

One of the main legislations pending before a group of ministers is to increase the foreign investment limit in insurance sector from the present 26 to 49 percent.

Similarly, while foreign investors can acquire up to 74 percent in Indian banks, their voting rights - that translates into effective management control - has been limited to 10 percent.

Industry wants parity in voting rights.

“We expect that in the next three months some major bills pending in parliament will also be pushed,” said Rajeev Chandrasekhar, president of the Federation of Indian Chambers of Commerce and Industry (Ficci).

“Once this flurry of reforms are undertaken, the confidence level which had been dropping over the last three quarters in the business confidence survey of Ficci will bottom out and will put the economy back into a growth trajectory.”

Even stock market indices - often seen as an immediate reflection of the mood of the investing public - gave a thumbs up to the victory in trust vote, primarily sensing a major push to unfinished agenda for the corporate sector.

The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) may have fallen Thursday. But a day after the trust vote, it had opened than 3 percent higher and ended the day with a gain of around six percent.

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