Sebi chairman rues reform inertia

Amid rising concerns about the India growth story, the government got an unusual critic today. U K Sinha, Securities and Exchange Board of India (Sebi) chairman, said the country needed to get its act together on policy reforms as well as execution.

He said the delay in reform process on several aspects was a serious issue and one needed to ponder over it. He was speaking at the SKOCH Summit on how to re-fuel the country's growth.

“There is an overall feeling of anger and rejection on how things which were so good four-five years back, not only in India but many other parts of the world, have come to such a stage. What is it that went wrong? What is it that we need to do?” he asked.

Sinha said some of the crucial reforms were pending for a long time. “Some of the reforms have been on the anvil for almost a decade and are yet to come through. That is something for all of us to ponder very seriously , on how long we can go on deferring this.”

He referred to issues regarding reforms in Foreign Direct Investment, the Pension Fund Regulatory and Development Authority (PFRDA) and insurance, among others.

Referring to the Employees Provident Fund (EPF), he said, “EPF, for example, must be having 40 million accounts and the amount would have been around Rs 200,000 crore. The Ministry of Finance has mandated that 15 per cent of that money must or can go to the markets. But that money is not coming, that reform is not happening,” he said.

“In a situation like this, we have to make an objective assessment of what has been forced upon us from outside the economy, but we cannot take shelter in the fact that things are here beyond our control or because of happenings outside the country,” Sinha added.

When asked about whether the regulator would allow extension of time for making public holding at 25 per cent for all companies, Sinha said, “Where is the question of extension coming from? The time given was three years. And if for some reason, people have not come out, that is their problem.” The deadline is set for June, 2013. The Confederation of Indian Industry  had recently sought for an extension of two years.