Economic Reforms Including GST and Insurance Amendment Bill are on the Anvil: FM

Economic Reforms Including GST and Insurance Amendment Bill are on the Anvil: FM; Calls for Large Investment from Domestic and International Investors in Infrastructure Sector


The Union Finance Minister Shri Arun Jaitley said that the Government has taken series of measures to tackle various challenges being faced by the infrastructure sector in the country. The Finance Minister said that many more such measures are in offing in near future. The Finance Minister Shri Jaitley said that he is in discussion with the members of opposition parties to make necessary procedural changes in Land Acquisition Act in order to avoid delay in the implementation of the infrastructure projects. The Finance Minister was delivering the Key Note Address at the Citi’s Investor Summit: “India – Poised for Higher Growth” here today.

The Finance Minister Shri Jaitley further said that various sectors have been opened for foreign direct investment in the infrastructure sector by the present Government. In this regard he specifically mentioned about the defence and power sectors among others. The Finance Minister said that the Government through its Budget has laid down a direction in which the economy is likely to proceed to restore the investors’ confidence. He said that there will not be any movement of economy in contrary direction.

The Finance Minister Shri Jaitley also gave details of various economic reforms which are in the pipeline. In this regard, he specifically mentioned about the Goods and Service Tax (GST) and Insurance Amendment Bill among others. He said that he is expecting that Insurance Amendment Bill will be passed in the forthcoming Winter Session of Parliament. He said that he is in touch with the Parliament Select Committee in this regard and will try to persuade it to give its report at the earliest.

As regards GST, the Finance Minister said that he is in touch with the various State Governments and most of the contentious issues have already been resolved. He said there are two areas including liquor and petroleum products where the States want to have taxation authority. Two States want entry tax and octroi to be kept-out of the purview of the GST. The Finance Minster said that all these issues will be sorted-out soon. He will also apprise the Empowered Committee of State Finance Ministers’ about the draft Constitution Amendment Bill on GST before introducing the same in Parliament.

The Union Finance Minister said that the targets fixed for disinvestment in the current financial year are quite ambitious one but he hopes to achieve that or reach near the same. He said that road shows in this regard are being held in many parts of the world.

The Finance Minister Shri Jaitley said that inflation, especially food inflation has moderated in last few months and global fuel prices have also come down. Therefore, if RBI which is highly professional organization in its wisdom decides to bring down the cost of capital will give a good fillip to the Indian economy.

Along with the Finance Minister, Shri Dinesh Sharma, Additional Secretary, Department of Economic Affairs, Shri S.S. Mundra, Deputy Governor, RBI and Shri Parmit Zhaveri, CEO, Citi Bank were also present on this occasion. The aforesaid Summit was also attended among others by domestic and international investors.

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Economy to grow at 5.5% in 2012-2013: Montek Singh Ahluwalia

Planning Commission Deputy Chairman Mr. Montek Singh Ahluwalia has said that the Indian economy will grow at a rate of 5 to 5.5% in 2012-2013 fiscal year.

As per media reports, in an interview to PTI, Montek Singh Ahluwalia said "It (GDP growth rate) would be somewhere between 5 and 5.5 per cent. If everything worked perfectly, I would not rule out seven per cent next year (2013-14)."

As per his words economy would give signs of recovery if the strength of recovery continues. Couple of days back, India President Pranab Mukhaerjee at the inauguration ceremony of 20th International Engineering and Technology Fair (IETF), said "Though our economic growth has recently declined somewhat, I am confident that we will be able to bring the deceleration to a halt and revert to the eight per cent growth levels that we attained many times in the past."

Due to subdued interest from Investors and some global factors, in 2011-2012 fiscal year, economy has come down to 6.2 from 9.3 percent in 2010-2011.

While talking to Reuters in an interview Social activist and Leader of Aam Admi Party, Arvind Kejriwal said that the figures are just meant for few people in India as a common man is always living the miserable life whether GDP increases or decrease.

Prime Minster's Economic Advisory Council C. Rangarajan also predicted the economy to bounce back to 6.5-7 in current fiscal year and predicted of more recovery in subsequent years.

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Warning by Fitch: India should Stick to Reforms and Meet Fiscal Targets

Putting further pressure on Indian government, which is keen to retain investment rates, Fitch ratings said on Monday “India needs to commit to its recent reform measures and meet its fiscal deficit targets. As we have previously said India’s patchy performance on policy implementation and the approach of a general election in 2014 could impede fiscal consolidation, suggesting political and implementation risk remain significant. We also need to observe the impact of reform and more broadly see how India’s macro-economic outlook develops over time. ”


This warning from Fitch comes after Standard and Poor’s analyst Kim Eng Tan last week told Reuters, the prospect, that India would lose its investment grade rating had receded somewhat as a result of economic reforms undertaken by the Government.

While discussing the raising of Taxes, Government sources told Reuters last week, that India is also cutting spending on Welfare, Defense, and road Projects. However, the Finance Minister, Chidambaram has restated a pledge to meet the fiscal deficit target, during his meetings with the foreign investors last week.

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Economic Reforms: Where is the Need?

In the last couple of months, Govt. has taken decisions that have affected the common man in a very bad way. Govt. stating that, the money does not grow on trees, is quite astonishing. It is a fact that money does not grow on trees, and it is also a burden on the Govt. to give subsidies, in the current economic situation. But, instead of looking for the sources from where the money can be brought and looking for the faults of the Govt. Such as assigning the gas resources to the private people without first thinking of the people’s necessities and requirements. Is quiet shocking?

Whenever and where ever (in any state of the country) the natural resources are found such as, oil gas and petroleum. It is the first responsibility of the government to think of the needs of the people, especially the middle and the lower classes, and then after they have reserved the necessary resources for the needs of the people, if they have excess, they can assign to the private people. Instead of doing this, decreasing the subsidies, and increasing the prices, is not a reasonable solution, and apart from this commenting that money does not grow on tree, or where does the money will come to Govt. These are not at all reasonable comments.

The other main thing is, instead of putting the pressure on the people for income or money. The Govt. should concentrate on bringing out all the money that corrupt people have earned, especially the politicians. It is a public secret that, there are thousands of crores in the foreign banks, all corrupt money. But the Govt. is not at all bothered to take action against them; if at all there is a necessity of reforms and strict decisions to be taken it is in this place. If Govt. is serious about the income it should take immediate action to bring all the money that is there in the foreign banks, earned by corrupt people in India, and use it for the benefit of the public.

In such a case the Govt. will also have sufficient funds to take care of the needs of the public, and there will be no necessity to impose any burden on the public, or to bring foreign funds or loan from World Bank.

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