NEW DELHI : Financial sector reform could be a game changer but consensus on it crumbles when it is hit by a “seizure of political opportunism”, Finance Minister P. Chidambaram said. “My experience has been that consensus is built after several months of hard work and then the consensus crumbles when it is hit by a seizure of political opportunism,” he said while addressing the Delhi Economics Conclave.
Financial sector reforms such as Goods and Services Tax, the Insurance Laws Amendment Bill and the Uniform Financial Code can have “profound implications” on the Indian financial sector, he said.
While the insurance bill, which aims to raise foreign direct investment limit in the sector to 49% from the 26% at present, has been pending in the Rajya Sabha since 2008, many states have declined to accept the Goods and Services Tax in its present form.
He also said that the centre will not compromise on containing fiscal deficit and consolidation will continue so that the gap is contained at 3% of the GDP by 2016-17. Meanwhile, Chidambaram tabled the second Supplementary Demand for Grants in the Lok Sabha, seeking approval to spend a net additional 131.27 bln rupees in the current financial year.
The centre has sought nod for gross additional expenditure of Rs 185.94 bln. Most of the net extra spending, around 94%, is on account of higher subsidies towards petro products and fertilisers. -Cogencis