Anguished over delay in key reforms for “years and years”,SEBI Chairman U K Sinha today said there is an urgency to revive investor sentiment and arrest the faltering economic growth.
“Some of the reforms,which have long been pending and one example being pension reforms… it has been years and years that some of these reforms…are yet to come through,” Sinha said at the Skoch Summit here.
Listing out the steps that are needed urgently,he said,”We all know what happened to FDI in retail,the pension Bill,and the pension reforms are yet another example.”
The pension reforms bill was deferred by the Cabinet yesterday in the wake of opposition from UPA ally,Trinamool Congress.
Calling for an urgent need to revive investor sentiment and economic growth,he said,”… that is something all of us have to counter very seriously,that how long can we go on deferring this… We cannot become complacent about policy making and implementation domestically.”
The country can still tide over the growth deceleration if some of the urgent reform measures are taken and the issues plaguing the implementation resolved.
Sinha said,”If we start making some progress on these things (reforms),then in spite of the forecast about our economy coming down from the higher levels of 2007-08; if these policies change…start happening,we can again come to levels which are commendable in comparison to any part of the world. (But) those changes have to take place.”
The SEBI chief said there is no reason why even private parties are not able to implement their projects on time. “I am bewildered that if an agreement has been signed between a raw material supplier and a utility,why it is not being honoured.”
The GDP growth hit a nine-year low in FY 2012 at 6.5 per cent due to a number of reasons,which many cite as policy inaction.
Most of the foreign banks and financial services majors like Goldman Sachs,Morgan Stanley,Citi and HSBC have lowered growth prospects to a low of 5.8-6.3 per cent for the current fiscal.
According to a CMIE estimate,as many as Rs 5 trillion worth of projects,mostly in the power and steel sectors,and running into 500 projects,were stalled in FY 2012 due for want of mandatory clearances,fuel,raw material linkages.
On the insurance front,he said the proportion of foreign investments is not increasing.
Last week the government had also decided against increasing the FDI cap in the insurance sector which is currently pegged at 26 percent.
On the tightening of the IPO listing norms,Sinha said the volatility which used to happen on the opening day has come down since the new norms were implemented.
“We’ve started this concept of call-auction in the pre- open market,(earlier there was high volatility on the listing day) after which there have been four IPOs,and our feedback is that all four of them have been free from any such managed volatility and the numbers have come down substantially,” he said.
Later talking to reporters on the sidelines,the Sebi Chairman said FIIs want to understand whether there is a slowdown in policy-making and growth.
On the new consent order norms,he said,”We have highlighted how particular cases are to be treated under the new Consent guidelines.”
Last month,the Sebi had revamped the widely criticised consent mechanism,which earlier used to give a lot of leeway to corporates.