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Journalism of Courage
MUMBAI, NOV 15: American insurance companies sought majority equity stake in insurance joint ventures as compared to the present 26 per cent. “There was not much difference between 26 per cent and 49 per cent as it would still leave the foreign partner with a minority stake… though it would mean pumping in more funds into the Indian economy,” said Dean O’Hare, chairman and chief executive officer of Chhub Corporation here today at the `Trade in services’ session of the US investment summit.
“We will take up the matter (to increase stake to majority) with the Indian government once the insurance bill in its current form is passed,” he said. Though the insurance executives of the US agreed that the limit should be raised to 49 per cent, they added that a 49 per cent stake would not make any substantive difference in their status. Hence, it should go up to 51%.
O’Hare warned if too may conditions were imposed on their functioning, then the US companies are “not interested”. It was against the spiritof free trade and against the objectives of the World Trade Organisation, he said.“The new Indian government’s avowed commitment of proceeding with the reforms in the banking sector was in itself a positive indication," he said.
It was also decided to recommend higher equity positions in private banks with foreign stake, while some of the members mooted the idea of US banks taking majority stake in weak banks.There was near unanimous agreement on the need to bring pension funds into the mainstream of investments, but with the caution that at present, only 10 per cent of their accretions should be allowed to be invested in the equity markets. Professionals should manage pension funds, they said.
Mumbai: Maharashtra chief minister Vilasrao Deshmukh today said the state government will look into the tariff structure Phase II of US-based Enron Corporation’s Dabhol power project (DPP) at Guhagar as they had `reservations’ about the tariff. “We will seek clarifications from Dabhol Power Company (DPC)on the tariff for the second phase,” Deshmukh said.
Congress in the run up to the elections had demanded that the Phase II of the 2,184 mw of the controversial project be suspended till the issue of seemingly high tariff was resolved.
Enron South Asia CEO and managing director Sanjay Bhatnagar said power tariffs in India are high because of high taxes on fuel and imported contents of the project. He cited the example of Bangladesh, where the per unit tariff is just three cents because fuel price is half compared to India and taxes and duties are nil.
