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It's a question of extent of foreign equity in insurance sector, says Sinha

The extent of foreign participation in the insurance sector is under the consideration of the government, Finance Minister Yashwant Sinha today told envoys of the European Union.

In an over one-hour interaction with the ambassadors and high commissioners of member-states of the EU in New Delhi, Sinha said ''It is no longer a debate of private participation but on the question of the extent of foreign investment.''

He said the government has changed the nature of debate on the subject.

Allaying fears in the mind of these countries that the present government was not open to foreign investment, Sinha said he was in fact looking forward to a much larger investment from them.

He told the representatives of the EU member-states that swadeshi did not not mean ' anti-technology' or 'anti-foreign investment', but reflects the concern for national interest in a world where each one is looking at ''one's own interest.''

On public sector restructuring and divestment, the finance minister said new instruments for disinvestment were under the consideration of the government and they would be able to go ahead with the first divestment by the end of this month or early next month.

On fiscal deficit, the finance minister that during the current financial year all efforts will be made to keep within the budget estimates.

The finance minister clarified that swadeshi does not mean 'protection' but participating and winning in international competition'. Addressing the ambassadors, he said that India is a growing economy and pointed out that India's economic progress has been sustainable. The minister also allayed fears that the present government was not open to foreign investment.

He said his government was interested in increasing the pace of economic developments. ''We are at the threshold of the 21st century and we have to accelerate the pace of development to keep pace with the rest of the world,'' he said.

Referring to the economic sanctions, the minister said that it was unfortunate that sanctions were imposed but said that whereever the government has had a dialogue with other countries, India has been able to put forward the reasons for conducting the nuclear tests and this has been appreciated by foreign countries.

The minister answered a number of queries in measures contemplated by the government for making the public sector more competitive, steps for improving infrastructure and queries on the present situation in the country. The minister said while India has had seven years of economic reforms, what remains to be done for economic liberalisation is the more difficult task and progress in these areas can only be on the basis of consensus.

On the effect of the Asian crisis and the lessons to be learnt, the finance minister pointed out that the calibrated process of economic liberalisation has helped India in avoiding the pitfalls of other east Asian countries. He said: ''India has been very cautious in our economic policies and what was seen as a weakness some months ago is now seen as a strength.''

He said that two points which are to be learnt from the Asian crisis is that a country should be cautious about short-term debts which in India's case have been kept within prudent limits. Secondly, there is transparency in country international financial transactions reflected by the weekly publication of the RBI's statistics.

The minister refuted statements to the effect that national security concerns have overshadowed economic and social concerns pointing out. National security is a primary concern of any country, however economic progress will have an equal priority, he said.

Sinha further disclosed that the prime minister at his level has had constant interaction with the industry and the foreign investors. The recently constituted Economic Advisory Council will go a long way in constant interaction with industry and business, he said.

During the meeting, the finance secretary, Vijay Kelkar brought to the notice of the EU envoys the problem of non-tariff barriers such as anti-dumping actions that are faced by Indian exporters which prevent free market access to the EU. Consequently, he said there was pressure from Indian industry to emulate the EU in imposing anti-dumping laws.

Ambassadors and representatives of the countries which attended the meeting are Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal, Spain, Sweden, the UK and Luxembourg.

UNI