ONGOING REFORMS TO IMPROVE INVESTMENT CLIMATE, SAYS ARUN JAITLEY
The Union Minister
of Law, Justice and Company Affairs, Shri Arun Jaitley has said
that it was time when economics dictated decision making process
and not the politics. Inaugurating the Tenth Annual General Meeting
of American Chambers of Commerce in India and speaking at length
on the impact of new economic legislation on investment in India
here today, Shri Jaitley said that politics has dictated all decisions
so far.
The Law Minister said
that the process of reforms set in motion for the last twelve
years and various economic legislations that were before the Parliament,
ones enacted, would improve the investment climate in India in
tune with the emerging globalization of its economy. In this connection,
the Minister referred to the legislation relating to fiscal responsibility,
labour reforms, electricity bill, new insolvency law, convergence
law, competition law, and the laws relating to foreclosures and
securitisation for recovery of debts that were on the anvil and
said that it was time that the financial system in which creditors
were chasing borrowers for recovery of debts ended. The Minister
cited that the pendency of debt recovery cases of banking and
financial institutions was of the order of 1.5 lakh crores, which
considered in the context of the overall size of union budget
which was of the order of 4.5 lakh crores, was disheartening for
investors. Nevertheless, the Minister assured the foreign investors
especially the Americans that vigorous efforts were on to improve
investment climate in India.
The Minister lamented
that the reforms in power sector had not taken off meaningfully
as in telecom and disinvestment of BALCO because of resistant
from some States. He said that a new law was on the anvil to convert
the milk producing cooperatives into companies so as to enable
them to mobilize the resources from the capital market without
compromising their character as cooperatives. The Minister referred
to the proposed competition law which intended to allow competition
and prevent abuse of dominance.
In the area of judicial
pronouncements, the Law Minister said that the recent judgements
on disinvestment of BALCO, contract labour law, and privatization
have shown a marked shift in judicial pronouncements designed
to give judicial approval to the process of privatization and
economic reforms. He also said that in the area of legal reforms
the process of legislation has changed to transparent system and
before any law was introduced and passed in the Parliament, the
contents of such laws were made public for generating debate to
improve the contents of such legislation. The Minister also said
that the Government was in the process of amending the Companies
Act in order to allow board meetings of companies through video
conferencing. He also referred to the regulatory mechanism that
was already in position and the proposed oil regulatory mechanism,
designed as substitute of High Courts, were in the direction of
allowing full throttled market forces of Indian economy. A lot
of self-education was needed to improve our system and there was
need for marketing the reforms. There has been a considerable
shift from licensing regime to revenue sharing system with the
emerging economic reforms of the legislation, he added. The Minister
also said that the Law Commission’s recommendations to improve
the Arbitration and Conciliation Act, 1996, were under consideration
of the Government. Once the 1996 Act was amended, it would improve
further investment climate in India, he added.
Later, the Minister
answered question-answer session.
