The Hindu Business Line : Policy reform options

Amend Coal Mines Nationalisation Act to allow regulated private entry into coal mining. Privatise old coal mines to improve recovery of “in-place” reserves by 5-10 per cent, subject to a professional, independent regulator for safety and environment issues.

PSUs

Complete the process of selling of 5-10 per cent equity in previously identified profit making non-navratnas. List all unlisted public sector enterprises and sell a minimum of 10 per cent of equity to the public. Auction all loss making PSUs that cannot be revived. For those in which net worth is zero, allow negative bidding in the form of debt write-off.

Industrial decontrol

Phase out control on sugar, fertilizer, drugs.

Oil

Sell old oil fields to private sector for application of Improved/Enhanced Oil Recovery Techniques.

Retail FDI

Allow a share for foreign equity in all retail trade. Allow 100 per cent foreign equity in foreign branded, specialised retail chains (e.g. Luxury Brands, Consumer Durables, Semi-Durables).

Insurance

Raise foreign equity share in insurance to 49 per cent. Allow 51 per cent foreign equity in a special category of insurance companies that provide all types of insurance (e.g. health, weather) to rural residents and for all agricultural related activities including agro-processing.

Banking

Allow 100 per cent FDI in Greenfield Private Rural-Agricultural Banks. Such a bank would be free to set up any number of branches in any rural or semi-rural area. It would be free to lend to agriculture and allied sectors, agro-processing and agro-input industries anywhere in the country and to any industry located in non-urban area (negative list). Such a bank would also be free to takeover (buy out) other private sector banks. As an incentive, such a bank could be allowed expansion into small towns when the general FDI policy on banks will be liberalised.

Factories act

Increase work week to 60 hours (from 48) and daily limit to 12 hours to meet seasonal demand through overtime.

Power

State Electricity Regulatory Commissions should notify rational, credible, cross-subsidy for open access so that it can become a reality. Open access should include access to electricity pillars to string a wire. Accountability for T&D losses on this wire will be with the wire owner and not on the distribution company that owns the towers. Permit private corporate investment in nuclear power, subject to regulation by AERB and AEC.

Railways

Freight Corridor: Public sector rail track company to own new tracks and signals. Free entry of private and public-private partnership rail freight companies.

Urban public transport

Public Transport (bus) systems in metros and large cities must be run by organised private companies that can use modern logistics and back office systems for planning routes and timings, acquiring and analysing data on usage densities and running an integrated people movement system. A comprehensive system of road parking fees must be devised and introduced in metros and large congested cities.

Bankruptcy law

Either introduce a separate section on bankruptcy in the Company Law or introduce a new bankruptcy law that facilitates exit of old/failed management as expeditiously as possible.

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