labels: economy - general, governance
New policy framework for financial sector — Chidambaramnews
Our Economy Bureau
18 May 2005

New Delhi: Finance minister P Chidambaram, said yesterday that a new comprehensive policy framework for the financial sector is being considered. The new policy, which would cover banking, pension, insurance and capital market, is expected to be ready by September.

Addressing the annual session of the Confederation of Indian Industry, the Chidambaram sought industry''s support in formulating the policy. He urged industry to hold dialogue with political parties, state governments, trading and exporting communities and the banking sector to ensure that its views were taken into account.

Chidambaram said policies in the financial sector were still evolving whereas the policy matrix was more or less complete in manufacturing, trading, services exports and taxation.

"Once the policy matrix for financial sector is complete, we must back it up with appropriate legislation so that all uncertainties that surrounds the financial sector reforms are put at rest in the first half of the current financial year itself," he said.

Making out a case for outward-looking policies on foreign direct investment, foreign institutional investment, tourism, services exports and remittances, Chidambaram said this was required to ensure that inflows from these sources grew at a pace that could balance the swelling trade deficit. "We have taken the rising trade deficit in our stride thanks to remittances and invisibles. But our exports must grow faster even though last year we had a staggering growth."

"The $30-billion trade deficit can be sustained only when there are matching inflows. There must be corresponding increase in remittances, invisibles and services exports. This would ensure that trade deficit does not become an albatross around India''s neck," he said.

 


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New policy framework for financial sector — Chidambaram