Chidambaram hopeful on insurance, pension reforms

Notwithstanding the logjam in Parliament, Finance Minister P Chidambaram on Friday exuded confidence that the government would be able to move ahead with the proposal to raise the Foreign Direct Investment (FDI) cap in insurance and pension sectors.

In his address at a seminar at the 46th ADB conference, he assured delegates that the country's economic growth rate would accelerate to over 8 per cent in the next three years, from about 5 per cent during 2012-13.

"FDI regime in areas like multi/single brand retail, airlines etc. have been further liberalised and I am confident there will be forward movement in areas like insurance and pensions," Chidambaram said.

The Insurance Amendment Bill to raise FDI cap in the insurance sector from 26 per cent to 49 per cent has been pending in the Rajya Sabha since 2008. Parliament has not been able to function properly with the Opposition raising the issue of coal and other scams and disrupting the sittings.

As regards the economic growth, Chidambaram said, "between 2004 and 2008 we grew at an average of 8.5 per cent. We have slipped in the last couple of years. Why should not we climb back to 8 (per cent)? I am giving myself three years to get back to that."

Referring to other reforms initiatives, the minister said that an independent regulatory authority would be announced shortly for the road sector and coal sector and for tariff setting in the Railways.

Chidambaram further said the government would be addressing the issues related with shortage of coal.

"Alleviation of coal shortages affecting power generation is being addressed by importing coal and assuring supply of definite quantities of domestic coal," he added.