Increasing FDI in insurance sector is top on UPA agenda: FM

Increasing foreign direct investment in A the insurance sector is top priority for the ruling UPA, Finance A Minister P Chidambaram said today, hoping that a bill to address A the issue will be passed in the upcoming Parliament session. Responding to questions at the Peterson Institute, Chidambaram appreciated A the efforts of the insurance industry in reaching out to the opposition A parties and hoped that this would help the political parties understand A the issues and thus help in the passage of the bill. "Parliament opens on April 22. It (Insurance FDI) is right there A in top of the agenda. We are stuck on one clause, FDI cap whether A it should be 26 or raised to 49. If the principle opposition party A comes around, the bill will be passed," Chidambaram said. "I am keeping my fingers crossed. I sincerely hope that the efforts A of the insurance industry in speaking to the opposition will be helpful A and I can pass the bill," Chidambaram said. Noting that without growth there will be neither inclusiveness nor A development, he said, "As long as the Congress is at the helm of A affairs, I believe that they will accept growth is necessary in order A to lead to inclusive development". "Once you accept that paradigm, you have to accept fiscal deficit, A you have to contain inflation, you have to contain expenditure, you A have to balance your books to a large extent," Chidambaram said. Responding to questions, Chidambaram said most state governments A have now realised that implementation of the programmes is the key. "Until about 10 years ago, most state governments were not re-elected. A If you were in office for five years, you were more or less certain A to be defeated in the next election. That seems to have changed in A India in the last 10 years," he said. "Incumbent governments are getting re-elected. The government in A the centre got re-elected in 2009 with a larger number. Since then A governments have been re-elected in Gujarat, Madhya Pradesh, Tripura A Nagaland, Assam, Mizoram, Meghalaya, and Orissa," he said. This has vetted the appetite of political leaders and political parties that perhaps defeat is not inevitable, perhaps A one can get re-elected for second or third term, Chidambaram added. "If you look at it closely, governments which are seen to have delivered A are the governments that are re-elected. I think this fever of implementation A seems to have caught on with more and more state governments. This A is a very welcome sign," Chidambaram said. "What we need to do is to find ways and means to get rid of bureaucratic A obstacles, policy obstacles to implementation," he said. Meanwhile, after the BRICS finance ministers met in Washington on A Thursday, Chidambaram said the preparatory work for establishing A a BRICS developmental bank would be completed in 12 months so that A the final decision on this would be announced by the leaders of Brazil, A Russia, India, China and South Africa during their next summit in Brazil. The Finance Minister of BRICS nations met in Washington on Thursday A on the sidelines of the annual Spring meeting of the International A Monetary Fund and the World Bank to take the next step towards the A establishment of the bank. "Before we go to Brazil for the next summit, we need to complete A our homework. Yesterday BRICS finance ministers met in Washington A and we reiterated out commitment to the BRICS bank," the Finance A Minister said speaking at the institute. "We have now said that deputies would be meeting and we will engage legal firm, we will draw up the concept paper, flesh A out, we will identify the agreement that would A have to be signed A and all this work will be done in 12 months," Chidambaram said. Questions of where the bank will be located and respective contributions A of member countries would be made by the leaders, he added. Noting that this is an ambitious agenda, and an aggressive time A table is needed to complete all the preparatory work so that the A BRICS leaders can take an appropriate decision in Brazil, Chidambaram A exuded confidence to complete the entire process in 12 months. A BRICS bank, he said, is a great idea. "Before (BRICS Summit in) Durban (South Africa) the finance minister A were asked to report weather a BRICS bank was feasible and viable. A That was the mandate given to the Finance Ministers," he said. "The Finance Ministers reported to the leaders in Durban that the A BRICS bank is both feasible and viable. So the leaders accepted the A report and announced that a BRICS bank would be set up," he said, A adding that it was no one's intention to set up a BRICS bank in Durban.