The Only Road From Here Is The Road Up: Sinha

Finance minister Yashwant Sinha today said that the current fiscal being a difficult one, the economy would register a satisfactory growth. He also said that the government would go ahead with its reforms agenda in all areas including labour and taxation and would do so in consultation with states.

"The only road from here is the road up," Sinha said at the Sixth Insurance Summit organised by the Confederation of Indian Industries. He also said that even at a lower rate of growth, India is among the faster growing economies in the world.

"Given the resilience of the Indian economy to overcome the present challenges, we will achieve a growth which is satisfactory," the finance minister said, adding higher savings in insurance and pension sectors were necessary for higher investments in infrastructure sector which boost the overall growth rate.

 

Citing latest savings figures, the finance minister voiced concern over the drop in public and private sector savings which dropped to 3.7 and 1.2 per cent of gross domestic product. Household savings, however, accounted for 19.8 per cent of GDP and were at the highest level in recent years.

He also said that though the present NDA government had gone ahead with reforms there was a problem of perception. Sinha made this reference especially in the wake of slowing inflows of foreign investment into India. "In case of FDI, we have gone about liberalising but the problem is one of image. The perception has not changed. What has happened in not known," he said.

He said in the last few years the perception about various policies, including disinvestment, have also changed.

Sinha also listed out reform measures in the insurance sector and said that the major objective of the government while opening the sector to private players was to launch new products and spread insurance coverage to push up savings which will lead to growth of the economy.

The minister listed six areas of reforms in the sector and said insurance regulation would have to be strengthened besides developing internationally accepted code and practices and improving the structure of insurance market.

He suggested that companies make available timely and reliable statistical data to increase transparency and strengthen the market. Sinha asked the industry to develop mechanisms to prevent systemic effects and emphasised high solvency on the part of insurance companies. There was also the need to improve corporate governance, financial accountability and resilience, he added.

Sinha also urged for improving the structure of insurance market and said the Insurance (amendment) Bill, 2001, presently with the parliamentary standing committee would be passed shortly.