Stage set for big-ticket reforms
It’s time to fasten your seat belts for some big-ticket reforms expected to roll out in a month’s time.
By Rajeev Jayaswal, TNN |
NEW DELHI: It���s time to fasten your seat belts for some big-ticket reforms expected to roll out in a month���s time. The reform initiatives include permitting 100% foreign direct investment (FDI) in insurance companies serving rural India, 49% FDI in all retail trade, incorporation of companies providing any kind of contract labour and allowing free entry of A-grade global universities.
The government is likely to further liberalise the insurance sector by raising the FDI cap to 49%. Alternatively, it is also planning to allow 100% foreign equity in specialised insurance companies limiting their activities to rural and agricultural areas. FDI in insurance sector is at present capped at 26%.
These recommendations form part of the XIth Plan reform agenda expected to be announced once the state elections are over.
The government intends to introduce some radical reforms to achieve a sustained double-digit growth in the Eleventh Five-Year Plan (���07-12) period. An approach paper to the XIth Plan is being finalised for getting the National Development Council���s approval. It is expected to be announced soon after Assembly elections, sources said.
On FDI in retail, it is being deliberated that 49% foreign equity should be allowed in all retail trade. Considering the impending political resistance to the move, an alternative of allowing 100% FDI in foreign branded and specialised retail chains is also suggested. Commerce minister Kamal Nath has hinted at some major policy level changes in retail FDI.
In order to give the manufacturing sector a boost, a change in contract labour regulations is also expected. It is proposed that companies providing contract labour should be held responsible for abiding by labour laws instead of companies using the labour. Lifting all restrictions on setting up of companies to provide contract labour also forms the part of the proposed reforms. There is also a proposal to allow ���A��� grade global universities into India without any restriction to further enhance the country���s knowledge economy.
Government sources said the issues will be put forth in the approach paper to the XIth Plan, which is expected to be tabled at the full Planning Commission meeting in May. The approach paper, which was to be tabled in December ���05, has already been delayed by four months due to political reasons.
The government is likely to further liberalise the insurance sector by raising the FDI cap to 49%. Alternatively, it is also planning to allow 100% foreign equity in specialised insurance companies limiting their activities to rural and agricultural areas. FDI in insurance sector is at present capped at 26%.
These recommendations form part of the XIth Plan reform agenda expected to be announced once the state elections are over.
The government intends to introduce some radical reforms to achieve a sustained double-digit growth in the Eleventh Five-Year Plan (���07-12) period. An approach paper to the XIth Plan is being finalised for getting the National Development Council���s approval. It is expected to be announced soon after Assembly elections, sources said.
On FDI in retail, it is being deliberated that 49% foreign equity should be allowed in all retail trade. Considering the impending political resistance to the move, an alternative of allowing 100% FDI in foreign branded and specialised retail chains is also suggested. Commerce minister Kamal Nath has hinted at some major policy level changes in retail FDI.
In order to give the manufacturing sector a boost, a change in contract labour regulations is also expected. It is proposed that companies providing contract labour should be held responsible for abiding by labour laws instead of companies using the labour. Lifting all restrictions on setting up of companies to provide contract labour also forms the part of the proposed reforms. There is also a proposal to allow ���A��� grade global universities into India without any restriction to further enhance the country���s knowledge economy.
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Government sources said the issues will be put forth in the approach paper to the XIth Plan, which is expected to be tabled at the full Planning Commission meeting in May. The approach paper, which was to be tabled in December ���05, has already been delayed by four months due to political reasons.
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