FM seeks political space for reforms

Underlining the reality that there is no consensus in the United Progressive Alliance (UPA) on economic reform, Finance Minister P Chidambaram today appealed to coalition partners and allies to give "political space" for pushing forward financial sector reforms.

Releasing numbers that showed the economy had achieved the highest levels of growth in the first quarter of the year in half a decade, Chidambaram wanted to convey the message that the economy was capable of meeting ambitious targets if it was allowed free political rein.

"We have to find political space to push forward reforms... Many matters are pending or in the pipeline; I wish everybody considers political space to push forward these reforms," the minister said.

Pointing out that financial sector reforms were crucial for sustaining high economic growth, he said important legislation relating to banking and pension sector reforms, as also the proposed Bill on insurance, were pending.

The Left parties are opposing pension reforms, which includes the appointment of a regulator in the sector and visualises a defined contribution scheme instead of a defined pension system.

The Left is also opposed to a bill to increase the FDI cap in the insurance sector from the present 26 per cent to 49 per cent.

Besides, banking reform bills like that for increasing the voting rights of foreign players in private sector banks in proportion to their share are also facing hurdles from the Left parties.