NEW DELHI: Finance Minister Arun Jaitley indicated on Thursday that India would be introducing more measures as part of its liberalization efforts, while ensuring that the economy remains insulated from the global slowdown.
He was, however, concerned over the increasing protectionist tendencies in Western economies, especially in the US (during the current election cycle), but hoped that post-elections the world’s largest economy will adopt a “business as usual” approach.
Jaitley told the audience at a BRICS seminar on Investment Flows, “I think the fears are real because the US is increasingly becoming more and more protectionist”. The Finance Minister promised to continue the government’s policy push to boost economic activities and investment flows into India.
Jaitley also pointed out that the domestic reforms would “neutralise” any adverse impact of the global slowdown.
“Over the last two-and-a-half years most of the sectors have been reviewed and we now have, probably, the most open FDI policy in the world — with 90 per cent of FDI coming in through the automatic route,” he said.
Jaitley reiterated that the ease of doing business in India has improved significantly under the NDA government and added that many policy changes in the recent past have added steadily to making processes easier to deal with.Jaitley also applauded the states for their competitive spirit in making themselves business-friendly.
Cabinet nod to EXIM Bank, NDB pact
The Union Cabinet on Thursday approved an agreement between the Export-Import Bank of India (Exim Bank) and BRICS-promoted New Development Bank (NDB), and other development financial institutions of member nations. The Memorandum of Understanding will be focused on general cooperation with NDB through the BRICS Interbank Cooperation Mechanism. The proposal was made at the level of Secretary, Department of Economic Affairs/Export Import Bank of India, an official statement said. The MoU is a non-binding umbrella agreement aimed at establishing a cooperation framework, besides skills transfer and knowledge sharing amongst the signatories.
New mechanism for ethanol pricing
The Cabinet Committee on Economic Affairs approved a new mechanism for revising price of sugarcane-extracted ethanol used for blending in petrol, resulting in drop in rates by H3 to H39 per litre — a move towards a free market structure. Oil companies have to necessarily blend up to 10 per cent of ethanol in petrol. The price of ethanol will now be determined on the basis of prevalent price of sugar in the open market, Oil Minister Dharmendra Pradhan said. “Any pricing mechanism should be market driven and we are moving towards that in case of ethanol as well,” he said. The NDA-government had in December 2014 fixed a price of H48.50-49.50 per litre for procurement of ethanol. The rate paid to sugar mills was never H48.50 but H42.