India Hints At Opening Up Of Insurance Sector

Indian representatives taking part in Saturday's session on India at the annual meeting of the World Economic Forum gave clear indication of their desire to open up the insurance sector and further bring down import tariffs in the forthcoming budget.

When asked about the government's plan for the insurance sector, finance minister P Chidambaram reminded a large number of foreign and Indian industrialists that his last budget in July had stated that he would come back with some proposals on the insurance sector in his next budget. "I still have 27 days to fulfill the promise," Chidambaram said with a pointed reference to the 1997-98 budget to be presented on February 28.

 

Responding to a question from a foreign insurance company representative, Chidambaram said there were views both for and against allowing foreign companies to set up wholly-owned insurance firms in India. A view on this would be taken soon, he said.

Chidambaram said the government was committed to reducing peak import tariffs from 50 per cent to Asian levels in the next three years and to world levels in four years thereafter. By that yardstick, the forthcoming budget should see a further cut in tariffs.

The finance minister disagreed with suggestions that there were hidden costs in the clearance of foreign investment projects. He advised foreign companies to seek prior clearances of power, environment and state-level fiscal packages separately from states, where their projects are likely to be located. This would remove delays and hidden costs, he said.

Chidambaram said the government had not been left alone without being a part of any trading bloc. He referred to the South Asian Free Trade Arrangement that was being finalised and the Indian Ocean Rim regional arrangement.

Earlier, Prime Minister H D Deve Gowda said the reforms will be accelerated and transparency ensured in all decision making. He referred to the Enron case and said even though there was a delay, the judiciary was there to ensure that all hurdles were removed in due course. Gowda urged the global investing community to shed fears about India.