MUMBAI, MAY 18: Finance secretary Vijay Kelkar on Tuesday said the second wave reforms will focus on four markets - capital market, money market, real estate market and labour market. "The focus will shift from the products market which was emphasised on in the first stage of reforms," Kelkar said while addressing a seminar organised by ICICI Securities in Mumbai on Tuesday.He said the implementation of second generation of reforms will emphasise the participation of the state governments. According to Kelkar who had a discussion with the chiefs of the financial institutions on Monday, the economy is making a fast recovery. ``The cement price has gone up and the applications for the housing finance loan has increased massively,'' he said.The finance secretary said the bullishness in stock markets can be sustained as the "return of the feel good factors" is not an accident. "It has a solid basis. The return of the investors will get further momentum. This is a fallout of the government's retreat frompopulism. It (the government) is taking a series of steps which are not very large but discernible and purposeful steps,'' Kelkar said.He referred to three instances of "retreat from populism" - the government is willing to reduce subsidies, it is openly talking about privatisation and it has also made a small beginning in downsizing. "The very fact that the finance bill was accepted by all political parties even though it has an element of surcharge on income tax and corporate tax shows the convergence of policies," he said.The finance secretary asserted that for the first time, the government is talking about privatisation and has shown a willingness to carry forward this process.The finance secretary said that the gold deposit scheme announced in the Union budget (1999-2000) needed a few clarifications before it can be operationalised. ``First, the Parliament has to permit futures trading and some changes in the relating export and import of the precious metal has to be brought about,'' he said.He informed that the government was actively pursuing strategic sale of its stake in the Indian Petrochemicals Corporation Ltd (IPCL) and BALCO.He further said that the 1999 Exim policy has accelerated the process of dismantling quantitative restrictions on trade. Kelkar said that important economic legislations held up due to the current political situation in the country will be cleared after the 13th Lok Sabha is constituted. ``The Parliament will pass the IRA Bill, FEMA Bill, amendment to the Securities Contract (Regulation) Act allowing derivatives and the Government Securities Act by repealing the Public Debt Act,'' he said.Speaking on the occasion, ICICI chairman N Vaghul lamented that lack of an adequate and transparent information base on the financial markets in particular and economy in general was one of the vulnerable points facing the country. ``India figures low in the list of countries that come out with financial data. This is exemplified by the swings in the provisional and finalfigures in the financial statements of companies. This difference is too large for international investors,'' he said.Vaghul further said that though interest rates have by and large been deregulated, there is reluctance to do away with regulation of the post office savings rate and 15-day interest rates. ``This creates distortions in the financial sector. Why do we need a complex mechanism of lending rates like short term prime lending rate (STPR), medium term lending rate (MTPR) and long term prime lending rate (LTPLR)?'' he wondered.On universal banking, Vaghul said that the world over this concept means segregation between investment and commercial banking, but in India it is whether development financial institutions should become banks or not.
