Budget Passage Clears Ground For Next Phase Of Reforms

The ratification of the Union budget for 1997-98 this week by Parliament is set to be the launchpad for the next phase of reforms to be unleashed by the United Front government.

Items on the anvil include a major thrust to attract infrastructure investment, which will entail a visit to the US by a team of top officials led by cabinet secretary T S R Subramaniam; a decision on the long awaited oil price hike and announcement of the guidelines for health insurance.

Finance minister P Chidambaram had announced in the budget that Indian-controlled companies would be permitted to enter the business of health insurance after comprehensive regulations were put in place by the Insurance Regulatory Authority of India (IRAI).

The endorsement of the bill for setting up the IRAI by the Parliamentary standing committee on finance has come as a shot in the arm for the government. Once the bill is approved by Parliament, the government will be able to proceed with reforming the insurance sector, including a recast of the investment norms for insurance companies.

The government is also working on a package for continuing the tax reforms. Measures include halving excise duties from the current eight rates