Second generation reform soon, says Sinha

A comprehensive paper on the second generation reform would be released quot;shortlyquot; to elicit opinion from all sections of the society including the peasantry and trade and industry, before implementation, he said.

Sinha later told reporters that the comprehensive paper on second generation economic reforms was being given final touches by the government and would soon be unveiled. He, however, did not divulge the exact period of release of the paper.

The finance minister told the gathering that the reform wouldalso encompass on revenue and fiscal deficit and Plan and non-Plan expenditure. He said the division between Plan and non-Plan expenditure had led to artificial distinction that led to distortion in the budget that caused harm to the economy.

Sinha expressed concern over the delay in passage of legislations such as the Insurance Regulatory Authority Bill, the Foreign Exchange Management Act and the Companies Act.

This will have to wait until the Lok Sabha is convened again after elections, he said adding 8220;it is a temporary set-back.8221; 8220;Though it is possible for the government to pass ordinances to put in effect some legislations, it is still a grey area,8221; he said. Sinha said the government was keen to clear the IRA Bill during the last session of Parliament and had listed it in the business.

He said the distinction between Plan and non-Plan expenditure had led to problems of provisions for assets created in the country through budgetary allocations. 8220;This has led to destruction along with theconstruction of assets,8221; he said.

Buildings were built of which some have collapsed and similarly roads and bridges were made but could not be properly maintained due to lack of provisions, he said adding this distinction between Plan and non-Plan would have to be re-looked in a careful manner.

The government was also keen to go ahead with zero-budgeting by making it necessary for the implementing agencies in the country to provide quarterly results of the amount spent on projects and not rushing in the figure before the end of financial year, he said. 8220;If any organisation responsible for implementing of the projects does not do so we will consider asking them to surrender the funds,8221; he said.

Sinha said he was unhappy that the budget was passed without discussion as discussions would have enabled him to introduce some amendments in accordance with post-budget representations received from various quarters. He blamed the opposition for it.

Sinha said the fractured mandate received by the partiesduring the last elections had led to political uncertainty. He said there were no differences on economic policies within the BJP as was vindicated at the recently held BJP national executive at Goa. 8220;There are also no differences between the BJP and its allies on the economic issues,8221; he asserted.

8220;It will be our endeavour to ensure in the coming months the implementation of the budgetary proposals,quot; he said adding 8220;there will be no let-up, no relaxation, no lethargy as far as various provisions of the budget are concerned.quot; Sinha said all efforts would be made to contain the revenue deficit and the fiscal deficit to two per cent of GDP as has been targeted. Sinha reiterated there were no differences between the RBI governor and him on interest rates and other issues.

He said the future reforms would also look into the aspect of making the RBI a purely custodian of the monetary polices and doing away with its equities in the banks. He said the government would deal with the problems of non-performingassets besides looking into the agricultural pricing and agriculture produce trading and putting in place the land reforms.

Sinha said the government was committed to going ahead with all the policies that had been cleared before the losing of the confidence motion, including the disinvestment of some public sector undertakings.

Later speaking to reporters, Sinha said the question of lowering of interest rates would have to be dealt by the Reserve Bank of India. 8220;The RBI has already brought down the bank rate soon after the budget and it is for it to decide on this aspect,8221; he said. He refused to comment on the rupee-dollar exchange value.