FM reassures India Inc on reforms

Finance Minister P Chidambaram on Thursday gave a strong indication that the economic reform process will continue on his last leg of his tw...

Finance Minister P Chidambaram on Thursday gave a strong indication that the economic reform process will continue on his last leg of his two-day confidence-building visit to the commercial capital.

‘‘The UPA (the United Progressive Alliance) government remains committed to powerful economic reforms and we will do everything to take this process forward. We also remain deeply committed to the fiscal prudence and discipline. The government is also committed to reining in the fiscal deficit,’’ Chidambaram said.

The economy is expected to witness a rush of investments, especially in the infrastructure sector in the next few months, Chidambaram pointed out in a short media briefing.

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The FM also put to rest all speculation about the presentation of the maiden budget of the UPA government and announced that the same for 2004-05 will be presented in the first week of July and hoped it would be passed by the first week of August.

Concluding his two-day visit to Mumbai during which the FM had a series of interactive meetings with the top brass of banking and capital market regulators — the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) — bankers, leading industrialists, brokers and foreign institutional investors (FIIs).

Chidambaram said many questions were raised about the CMP which have been clarified. ‘‘Everyone seems to be satisfied with it and the CMP will take the reform process forward and make the Indian economy stronger. There are positive signals in the power sector, which is expected to see a rush of investments in the next 10 months.

‘‘After a prolonged investment drought, we can see investments picking up with bankers and industry expecting a rush of investments in the next 10 months and thereafter,’’ he observed.

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While promising massive public investment, Chidambaram said: ‘‘I regard my role as a minister for investment. My job is to promote investment… After a prolonged investment drought, we can see investments picking up. In the last 10 weeks, six power projects of 3,700 MW capacity have achieved financial closure and 10 power projects of around 7,000 MW are in the pipeline, along with several projects from other sectors, which was a good sign.’’

Earlier in the day, Chidambaram had a breakfast meeting with RBI Governor Y V Reddy.

Industry endorses his views

		• Mukesh Ambani, CMD, Reliance Industries Ltd: ‘‘The industry should understand that economic reforms have to benefit the masses and not just for the sake of reforms.’’ • Anand Mahindra, president, CII: ‘‘The new government is committed to take the reform process forward. Besides, it also wants to see that the economy continues to grow at the rate of 7-8 per cent per annum.’’ • Sanjay Lalbhai, chairman, Lalbhai Group: ‘‘There was no discussion on any specific industrial sector as it was confined more to the macro level. Though Chidambaram has said he was committed to reforms, he also made it clear that fiscal prudence and discipline would top his agenda.’’ • Hemendra Kothari, chairman DSP Merrill Lynch: ‘‘FIIs will react positively after what we have heard from the finance minister. As policies would be made keeping the fiscal in mind, you are going to see a responsible government committed to reforms, driving the economic growth at 8 per cent.’’ • Uday Kotak, vice chairman, Kotak Bank: ‘‘There was lot of uncertainty, but Chidambaram sent right signals by doing the great job of communicating players from the financial market’’.

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