Govt. working on taxation reforms

NEW DELHI, NOV. 1. The Finance Minister, Mr. Yashwant Sinha, today informed industrialists that taxation reforms were on the agenda of the Government and assured them that the industry would not be put to a disadvantage because of these.

Inaugurating an insurance summit organised by the CII here today, Mr. Sinha said the Government was committed to carrying the reforms process further and that important legislation were on the anvil.

But since India was a parliamentary democracy, these legislation would take time as they had to be scrutinised by the parliamentary standing committees. States' involvement was crucial to take forward the second phase of economic reforms.

Mr. Sinha said that despite the current fiscal year being overshadowed by uncertainty in the wake of internal and external factors, India would still be one of the fastest-growing economies.

On the slowdown in the inflow of foreign direct investment, he said India would have to transform its image and perception in the international arena.

Mr. Sinha suggested that private insurance companies should not confined themselves to urban areas but head for the rural areas as the potential there was vast. Public sector insurance companies had been ``energised'' with the advent of competition and were doing very well in the rural areas.

He also suggested that the new insurance companies develop a code of good practices based on international best practices to raise the standard of the Indian insurance sector.

Mr. Sinha said the insurance sector encouraged savings and would fuel economic growth since it was the major source of long-term funds required for infrastructure development.

The chairman of the Insurance Regulatory and Development Authority (IRDA), Mr. N. Rangachary, said that at the end of the next 10 years, there would be an upsurge in consumer awareness and increase in expectations which would have to be matched by the insurance companies.

``Technology will decide if the present players will be able to hold out or not. The companies will have to deliver and deliver quickly. Many companies will have to restructure, especially in the case of general insurance.''

The IRDA chairman also visualised a situation in which the regulatory regime would have to go and tariffs would have to be fixed on the basis of demand and the insurance market would have to be completely free market.

Mr. Rangachary also emphasised the need to strengthen the health insurance sector.

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