Thursday, October 4, 2012

India to announce more reforms

India's government is due to announce more reforms to boost a slowing economy, reports say.


The cabinet is likely to approve bills that would raise the limit on foreign direct investment in insurance companies and open the pension sector to foreign investors.

The bills will then need parliamentary clearance before becoming laws.

Last month the government announced the opening up of India's massive retail sector to foreign supermarkets.

The government also announced a 14% rise in the price of diesel, which is heavily subsidised in India, and reduced the subsidy on cooking gas cylinders. Opponents say the measures will hurt the poor.

Reports say the government is also planning to amend legislation on contracts and competition laws, and announce the setting up of a national investment authority.

In a BBC interview on Wednesday, India's Finance Minister P Chidambaram promised more reforms in banking, insurance and other sectors.

"It will be clear we are on the reform path," he said. Mr Chidambaram said the country would "return to 9% growth" once certain "fundamental constraints are addressed".

The latest forecasts from economists at the Asian Development Bank are less optimistic, however, suggesting that India's growth will slow to 5.6% this year, before picking up to 6.7% in 2013.

bbc.co.uk

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