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NEW GOVERNMENT FOR
A FREER ENVIRONMENT
Indian President K.R. Narayanan set the
tone for what is to come with the National Democratic
Alliance in power in his address to the joint session
of Parliament last week. He said the government's target
was to attract foreign direct investment worth $10 billion
per annum and it would take all steps to ensure that
this goal is achieved. He added that a commission was
being set up to review the Constitution and make recommendations
on meeting the challenges of the next century. He was
obviously referring to the passage of legislation, which
would ensure that a government has a fixed term of five
years in the Lower House without fears of it being toppled
through a vote of no-confidence. On the economic front,
he said the aim is to achieve $50 billion worth software
exports by 2008.He added that the more than century
old The Indian Telegraph was to be replaced by a new
legislation.
Meanwhile, moves are afoot within the
industry ministry to increase the quantum of foreign
equity in select sectors from 51 per cent to 74 per
cent and in to 100% other sectors where a 74 per cent
cap is applicable currently. The latter initiative is
expected to benefit the non-conventional energy sector,
film roads and ports. The liberal mood was evident in
the credit policy announced by the central bank, the
Reserve Bank of India, which has worked to inject further
liquidity into the system.
Additionally, the government according
to a local financial daily is working on strengthening
the powers with the telecoms regulator the Telecom Regulatory
Authority of India (Trai). The Trai has limited powers
and has in the past been at the receiving end of the
department of telecommunications, which has shot down
its recommendations and gone to court against it. A
faction in the government wants to empower the Trai
and prevent such situations from recurring.
Meanwhile, India - and more specifically
the eastern state of Orissa - is recovering from the
freak cyclone last week, which devastated the state
and left millions of people homeless. The Central government
has sanctioned more than Rs 3,500 million to the state
to help its denizens to recover from the calamity.
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