Land Acquisition, FDI In Retail, Insurance Top PM's Reform Agenda.

Prime Minister Manmohan Singh on Wednesday flagged amendments to land acquisition law, allowing more foreign investment in retail trading and insurance and introduction of good and services tax (GST) as the key reforms agenda of the government.

"I think the first thing is to sustain the momentum of growth that we have built," PM said during a meeting with a group of editors. But a key theme underlying Singh's reforms plan was support from the Opposition, especially Bharatiya Janta Party.

Singh, who is credited with ushering in economic reforms 20 years ago, accused BJP of playing politics with GST. "There are other (reform) issues also – the consensus that emerged until a few months ago on the Good and Services Tax – the BJP is clearly playing politics, they do not want the government to pass this landmark legislation," he said. This is the second time during a media interaction that PM has blamed BJP for derailing what is billed as India's biggest tax reform.

But if he blamed BJP for blocking GST, he almost tried to use an IOU to seek the main Opposition party's support for increasing the foreign investment ceiling for insurance from 26% to 49%. "We had helped the BJP pass the first insurance bill. All we want now is to increase the share of FDI to 49%. The bill is in Parliament. I hope we can still persuade the opposition and other parties to pass the bill. Insurance industry needs that capital. Domestic industrialists don't have that large capital base. They need that support," the PM said.

The Insurance Bill is being reviewed by the parliamentary standing committee headed by former finance minister Yashwant Sinha, Singh's predecessor in North Block, and indications are that the panel might not support the move to raise the foreign investment cap.

In case of retail, where a proposal to allow global chains to enter the Indian market is awaiting government decision, PM sought to push the case for allowing foreign investment arguing that it would help improve supply-chains and distribution of food supply. At the same time he tried to soothe swayed nerves of small traders who fear they might be out of business. "There is fear of small traders, but without breaking such institutional barriers, there is fear of food inflation. I am hoping we can make a beginning in these areas. These are some of the ideas that are uppermost in my mind," Singh said.

FDI apart, management of scarce natural resources, especially land, and checking leakages in the subsidy mechanism appeared to be on top of the PM's agenda. In the backdrop of nationwide protests over land being taken over by corporate houses for constructing industrial and infrastructure projects as also for real estate, Singh said the policies will need to be amended.

On the issue of subsidies and leakages, the PM appeared hopeful of devising a way that would not just address concerns of Sonia Gandhi-led National Advisory Council (NAC) but also those of the food ministry and his own advisors. A key concern is the government's ability to meet the subsidy bill as also procure food grains. Leakage from the system is another worry.

Singh, however, said the new mechanism being put together by Nandan Nilekani, who is also heading the Unique Identification Authority of India, could address the problem of subsidies not reaching the intended beneficiaries.

He also flagged the issue of expanding the health insurance system, which is being gradually expanded.

Source : timesofindia.indiatimes.com