Economic reform in India is art of possible: Jaitley

New Delhi, Nov 5 :

Underlining major challenge for the government in marketing reforms in India, which has a large mass living at subsistence levels, Finance Minister Arun Jaitley Wednesday said reforms are a continuous process of unfolding of the “art of the possible”.

“In a country where 30 percent of people are living below the poverty line, your reforms cannot be one that you simply confront public opinion, or the sectors that you simply find a huge amount of reluctance for reformation,” Jaitley said at the India Economic Summit here.

“Reform is the art of the possible. There is a lot that has to be done. I am quite satisfied with the beginning we have made but it’s a long journey,” he said.

“Reforms are not about one sensational idea. We need to pursue a positive direction,” he added.

Jaitley said for a government to market reforms to a large mass of people like the 30 percent living below the poverty line is a very challenging task.

Saying that the reforms process in India has to weigh the requirements of each sector, the finance minister cited the example of the defence sector where the foreign equity ceiling has been raised to 49 percent from 26 percent by the new NDA government.

“This was accompanied by a big debate on the benefit (of raising FDI in defence) on Indian society and I can see the ripple effects already,” Jaitley said.

The minister said he hoped to have the Insurance Laws (Amendment) Bill passed in the winter session of parliament.

Jaitley highlighted the central government’s seriousness to reform by citing the ordinance on coal blocks de-allocated by the Supreme Court.

“Discretion in the hands of the state has almost disappeared. We are also planning to introduce similar reforms for other minerals,” Jaitley said.

As per this ordinance, while state-owned organisations like NTPC and state electricity boards will be allocated blocks according to their requirements, actual users of steel, cement and power from the private sector will bid for the blocks.

Jaitley said the aim is to conduct the whole process in a fully transparent manner through e-auction, without any discretionary powers of the government in the matter.

He also said the government is considering changes to some “illogical provisions” of the Land Acquisition Act.

“There are some illogical provisions like land cannot be used or acquired under this law for private educational institutions, private hospitals and hotels. There are some factors in it which certainly require a relook,” Jaitley said.

“By this, a new apital of Andhra Pradesh, or the 100 smart cities proposed cannot have private universities and schools, private hospitals or hotels,” he added.

The act now makes it mandatory to take the consent of 80 percent of the people whose land is taken for private projects. In the case of public-private-partnership projects, the consent of 70 percent of people is required.

“As defence minister, I face difficulties every day, even defence is not exempt,” Jaitley, who holds this additional charge, said.

The finance minister said currently the government is following the approach of divestment rather than outright privatisation, adding he would be open to loss-making public sector units being sold off.

(IANS)