The Hindu Business Line : Govt sets up panel to open up legal services

FDI issue
Another committee set up to look into FDI issue in education sector
Inflow in Julyhad recorded a 259 pc growth and touched $1.163 b

New Delhi , Oct. 6

In a signal that the Government intends to move forward on opening up the legal services sector, the Minister for Commerce and Industry, Mr Kamal Nath, on Friday said that a panel of lawyers had been constituted under the UK-India Joint Economic and Trade Committee (JETCO) to work with a similar group in the UK and deliberate on opening up the legal services sector. The Government has also set up another committee to look into the issue of FDI in education sector, he said.

Earlier, on Thursday, the Prime Minister, Dr Manmohan Singh, too, had pitched for a more open legal sector.

Today, Mr Nath said that primarily the task has been left to the legal communities of the two countries to decide on what they seek from each other. "We have set up a group of lawyers to work with groups in the UK and the US. Let them first work out their divergences and identify their needs after which things may proceed," he told newspersons here.

Citing an example, he said that the number of partners allowed in Indian partnership law firms and the number in the UK are not the same and many such factors are to be examined by the groups.

Opening up of the legal services sector could become a contentious issue with sections of the domestic legal community already voicing their opposition.

FDI in stock exchanges

On the issue of allowing foreign direct investment (FDI) in stock exchanges, the Minister said, "FDI is always welcome in stock exchanges. But nothing has happened on this issue so far."

Talking about the overall FDI scenario, Mr Nath said that India was attracting substantial amount of investment in spite of competition from Thailand, Malaysia, Bangladesh and China. The FDI inflow in July had recorded a 259 per cent growth and touched $1.163 billion, compared to $324 million in July 2005.

The Minister also pointed out that FDI inflows have increased substantially during the past three years. "Out of the total FDI inflow of $50.1 billion since 1991 to July 2006, around $15 billion has come between April 2004-July 2006 period," he said.

Barclays Plc was the largest investor in July, bringing FDI amounting to $380.27 million and the second largest investment was in Mphasis BFL amounting to $377.19 million, Mr Nath said.

Commenting on the industrial growth figures released last month, the Minister said the growth in the Index of Industrial Production (IIP) was propelled by the consistent high growth in the manufacturing sector output, which rose by 13.3 per cent in July.

He also pointed out that while industrial production was the highest in a decade, the inflation rate remains moderate at 4.77 per cent for the week ended September 23.

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