State Vows To Act As Facilitator

The Maharashtra government has assured investors that it will act as a facilitator and not as a regulator. State chief secretary Dinesh Afzalpurkar said the government will ensure that procedures are simplified and private sector participation is enhanced.

He said the state government has emphasised on infrastructure. Procedures will be simplified to attract more investors. While the state government called for investor participation in 55 projects set aside for privatisation, Merrill Lynch chairman Chrishtopher Reeves spoke on financing such mega projects. He said: Domestic savings have to be mobilised to fund such huge infrastructure projects. There is an urgent need to create a bond market that can provide for long debt which will enlarge and diversify the investor base. There is a need to enlarge and diversify the investor base. Restrictions on the corporate debt will also limit investment. The 20 per cent withholding tax imposed on FIIs will inhibit their appetite for investment despite being allowed to set up 100 per cent debt funds.

 

Reeves pointed out the need for opening up the insurance sector so that there is an efficient utilisation of funds into the secondary debt market. He also called for a need to have credit rating for the government paper. He said: Infrastructure projects can be funded by long-term debt instruments and there is a good appetite for good Indian companies in the US. The 50 and 100 year-old Yankee bonds issued by Reliance should serve as a benchmark for other Indian companies. He also called upon the state to set up a state disinvestment authority to implement the divestment plan initiated by the Centre.