Mumbai, Nov 8
THE US Treasury Secretary, Mr John Snow, has called for opening up of India's banking and financial sectors.
Referring to his meeting with officials at the Reserve Bank earlier in the day, he said the officials talked about a `road map' that will widen the scope for non-Indian banks to operate in Indian environment.
"That is the right way to go. Larger participation in your markets by non-Indian banks will help strengthen your financial sector. I know there is a lot of interest by non-Indian banks in opening branches and spreading financial services throughout the country," Mr Snow said while talking to the media here on Tuesday.
Bringing in the capital and expertise of non-Indian banks to complement that which is available within India will give a `leg-up' to the Indian financial sector, he said.
India is emerging as one of the economic powers of the world with a high growth rate and that is good for the global economy that needs more growth. "Traditional sources of growth have slowed down. India can supplant it," he said.
Talking of the Indian financial sector, Mr Snow said the US wanted to engage on that issue with India's business and political leaders and economic policy makers.
Keen on infrastructure: Another area that interested the US was the opportunities offered by infrastructure sector that was at the forefront of India's future. This included roads, railways, ports, power, housing, urban development and airports, he said.
Infrastructure needs to get financed. Further modernisation of the financial sector of the country will make possible lower cost financing for infrastructure.
"That is a subject that we continue to come back to and talk about. Further openings in the financial sector such as pensions, insurance and banking will help develop long-term lending. These projects have a long life term and needs financing that fits those requirements," Mr Snow said.
Judicial system `slow': However, for the US to take advantage of the infrastructure opportunities, there was need for some improvement in the way the Indian judicial system works, he said.
"There has to be some improvement in the way the judicial system works, to expedite dispute resolution. For many of the people who would be potential investors in India, one of the concerns they have is the long time it takes to resolve potential disputes. Uncertainty is not of the outcome but the time taken," he said.
Answering a question, Mr Snow said the central banks across the globe had done well in keeping inflation levels stable. "The world has to lean against inflation. It is the role of central bank governors to create conditions for sustainable non-inflationary growth. There is a benign inflation environment the world over," he said.