Pranab vows pension, banking, insurance reforms this year

In the wake of the controversy over reported remarks by Kaushik Basu, the prime minister's chief economic advisor, that major economic reforms would not go through in the present political climate and would have to wait till the 2014 elections, finance minister Pranab Mukherjee said in Washington on Friday that three key legislations - on pension, banking, and insurance - would will be passed this year.

In the US for the annual spring meeting of the International Monetary Fund and the World Bank, Mukherjee said at the Peter G Peterson Institute for International Economics, a Washington-based think-tank, that the government is committed to economic reforms and has initiated legislative and administrative changes in a number of directions to this end.

"We are now at a juncture when it is inevitable to take some hard decisions. And this has been our approach, as I outlined in the proposals for the Union Budget 2012-13 recently," he said at the meeting jointly organised by the Chambers of Indian Commerce & Industry (CII).

"In fact on the legislative front, we have already committed the preliminary legislative process for the Pension Fund Regulatory Act, the Insurance Act and the Banking Amendment Act. These three acts I do hope would get legislated in this calendar year - if not in this parliamentary session, then the next [monsoon] session," Mukherjee said.

At the same time, he acknowledged that there were certain reforms which could face difficulties given the challenges of coalition politics.

"Of course we have to persuade various stakeholders, including state governments … if we could do so perhaps the amendment to the Constitution necessary to implement GST [the proposed goods and services tax to rationalise indirect taxes] would get it through this or the next session of the Parliament and thereafter to be ratified by minimum 15 state assemblies before the end of the year," he said – striking an almost visibly overoptimistic note.